Weekend Economists: Going To the Dogs March 26-28, 2010

[Demeter]

Up In Arms had this lovely suggestion for our theme, which enables Ozy's theme, as well.



Since the country is going to the dogs from every conceivable point of view, I think we have a real crowd pleaser. Of course, the Blue Dogs will think this reflects well upon them....but what they don't acknowledge will bite them in the end!

So, the wheels of justice, greased with the tears of their victims and the sweat of the righteously outraged, are beginning to grind upon our economic miscreants.
I had hoped and wished and blogged for this, and I am gratified that it didn't take 60 years, nor even as long as the Pecora Commission. Perhaps there is still hope for War Crimes and punishment! Those pesky Statutes of Limitation don't apply.

So, sit back, enjoy the sightings of Spring and of Nemesis (Greek), Morrigan (Celtic), the Erinnyes: Alecto, Tisiphone and Megara (Greek); all Goddesses of Vengeance.

I guess the Greeks were big on vengance--maybe they still are, what with their economy in tatters. We shall see!

I ALMOST forgot the music!

http://www.youtube.com/watch?v=gj0Rz-uP4Mk

http://www.youtube.com/watch?v=ZXiulKIgGpg&feature=related

[FrenchieCat]

1. The Country WAS going to the Dogs,

and is now in the very able hands of this President.

Trying to talk down this economy ain't gonna work,
because sooner than is known, will be on a much sounder foundation,
than we have been in the last 20 years.

[bread_and_roses]

58. ROFL! A Seer among us! A very sound foundation indeed - for our ruling Oligarchy

"sooner than is known?" you have special inside information? or special powers of precognition? From Wiki:

Precognition (from the Latin præ-, “prior to,” + cognitio, “acquiring knowledge”), also called future sight,<1> refers to perception that involves the acquisition of future information that cannot be deduced from presently available and normally acquired sense-based information.

(my emphasis added)

Hard to believe there was anything of interest on National Propaganda Radio, I know, but buried in an excerpt on the website is this little nugget- not news to any of us here in WE; it's even the remote reference on NPR that's astonishing:

Here's what "sense-based information" tells us:

http://www.npr.org/templates/story/story.php?storyId=125226783

The Wall Street banks are the new American oligarchy — a group that gains political power because of its economic power, and then uses that political power for its own benefit. Runaway profits and bonuses in the financial sector were transmuted into political power through campaign contributions and the attraction of the revolving door. But those profits and bonuses also bolstered the credibility and influence of Wall Street; in an era of free market capitalism triumphant, an industry that was making so much money had to be good, and people who were making so much money had to know what they were talking about. Money and ideology were mutually reinforcing.

In the United States, we like to think that oligarchies are a problem that other countries have. The term came into prominence with the consolidation of wealth and power by a handful of Russian businessmen in the mid-1990s; it applies equally well to other emerging market countries where well-connected business leaders trade cash and political support for favors from the government. But the fact that our American oligarchy operates not by bribery or blackmail, but by the soft power of access and ideology, makes it no less powerful. We may have the most advanced political system in the world, but we also have its most advanced oligarchy.

Obama has done precisely nothing to address this, and in fact, has become its enabler-in-chief, its best friend, its very own Bankster Pot-o-Gold Savior, his mellifluous tones presenting them with the giant honey-pot of the people's sustenance for their feasting.

Sound! Oh, indeed!

[Tansy_Gold]

66. You're preachin' to the choir, B'n'R.

But it's THEIR choir you're preachin' to, and their hymn is "Hallelujah, Hallelujah, I'm not hearing you!"

:yourock:



Tansy Gold, off to preach the gospel of William Morris once again ;-)

[DemReadingDU]

79. Thanks for the link

I missed that yesterday.


BTW, poster #1 reminds me of my family and friends. It's all good out there, the market has rebounded,
they're buying McMansions and status cars, they're taking exotic vacations, and Obama is doing a great job turning around the economy. Nothing to worry about.

:eyes:

[fasttense]

80. Just to add to the realism of what you are saying bread_and_roses

The headline from my hometown newspaper - 27 March 2010:

"Jobless Rate Rises To 16.6% In Greene County."

[Dr.Phool]

81. They opened th Kool-aid stand early last night.

Dear Leader would be impressed!

[Tansy_Gold]

2. As the proud owner of four lovable pooches

GREAT CHOICE!

But I won't be around much to enjoy it as I have two art shows this week-end. I'll try to check in, though, and let you know how good -- or bad -- the economy is in my part of the (real) world.


Tansy Gold, with the car almost packed and ready for a 6:30 A.M. departure

[Demeter]

4. Break a Leg---Or Not

Knock 'em dead? Sell it all to the bare walls? Good Luck!

[Dr.Phool]

27. Dawgs?

[Tansy_Gold]

44. Dawgs!

Chiquita


Miss Mattie


Moby and Biscuit

[UpInArms]

43. good luck to you, TG!

haven't done a show since '07 - my new show runs on a weekly basis - someday, I'll talk publicly about what I'm currently doing with my "spare" time.

But, in the meantime, hope all your art is loved and find permanent homes.

:grouphug:

[Demeter]

3. Three Banks Already at 6:30 PM Good Old Georgia on FDIC's Mind

Unity National Bank, Cartersville, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of the Ozarks, Little Rock, Arkansas, to assume all of the deposits of Unity National Bank.

The five branches of Unity National Bank will reopen on Saturday as branches of Bank of the Ozarks...As of December 31, 2009, Unity National Bank had approximately $292.2 million in total assets and $264.3 million in total deposits. Bank of the Ozarks did not pay the FDIC a premium to assume all of the deposits of Unity National Bank. In addition to assuming all of the deposits, Bank of the Ozarks agreed to purchase essentially all of the failed bank's assets.

The FDIC and Bank of the Ozarks entered into a loss-share transaction on $206.1 million of Unity National Bank's assets. Bank of the Ozarks will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $67.2 million. Bank of the Ozarks' acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Unity National Bank is the 40th FDIC-insured institution to fail in the nation this year, and the seventh in Georgia. The last FDIC-insured institution closed in the state was McIntosh Commercial Bank, Carrollton, earlier today.

Key West Bank, Key West, Florida, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Key West Bank.

The sole branch of Key West Bank will reopen during normal business hours beginning Saturday as a branch of Centennial Bank...As of December 31, 2009, Key West Bank had approximately $88.0 million in total assets and $67.7 million in total deposits. Centennial Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Key West Bank. In addition to assuming all of the deposits, Centennial Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Centennial Bank entered into a loss-share transaction on $75.8 million of Key West Bank's assets. Centennial Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $23.1 million. Centennial Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Key West Bank is the 39th FDIC-insured institution to fail in the nation this year, and the sixth in Florida. The last FDIC-insured institution closed in the state was Old Southern Bank, Orlando, on March 12, 2010.

McIntosh Commercial Bank, Carrollton, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CharterBank, West Point, Georgia, to assume all of the deposits of McIntosh Commercial Bank.

The four branches of McIntosh Commercial Bank will reopen during regular business hours beginning Saturday as branches of CharterBank...As of December 31, 2009, McIntosh Commercial Bank had approximately $362.9 million in total assets and $343.3 million in total deposits. CharterBank did not pay the FDIC a premium to assume all of the deposits of McIntosh Commercial Bank. In addition to assuming all of the deposits, CharterBank agreed to purchase essentially all of the failed bank's assets...The FDIC and CharterBank entered into a loss-share transaction on $263.1 million of McIntosh Commercial Bank's assets. CharterBank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $123.3 million. CharterBank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. McIntosh Commercial Bank is the 38th FDIC-insured institution to fail in the nation this year, and the sixth in Georgia. The last FDIC-insured institution closed in the state was Bank of Hiawassee, Hiawassee, on March 19, 2010.

[Demeter]

32. Arizona Bank Joins the List

Desert Hills Bank, Phoenix, Arizona, was closed today by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all of the deposits of Desert Hills Bank.

The six branches of Desert Hills Bank will reopen on Monday as branches of New York Community Bank...As of December 31, 2009, Desert Hills Bank had approximately $496.6 million in total assets and $426.5 million in total deposits. New York Community Bank did not pay the FDIC a premium to assume all of the deposits of Desert Hills Bank. In addition to assuming all of the deposits, New York Community Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and New York Community Bank entered into a loss-share transaction on $325.9 million of Desert Hills Bank's assets. New York Community Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $106.7 million. New York Community Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Desert Hills Bank is the 41st FDIC-insured institution to fail in the nation this year, and the first in Arizona. The last FDIC-insured institution closed in the state was Valley Capital Bank, N.A., Mesa, on December 11, 2009.

[Demeter]

38. Total Hit Tonight--Preliminary Estimate: $320.3 Million of Your Dollars

[ozymandius]

33. Pretty soon - the OTS will shudder Georgia piggy banks and mattresses.

This is just ridiculous. I remember when Georgia bank deregulation passed in the state legislature. It only took eleven years to get to this sorry state.

[Demeter]

5. Why Do Consumers Accept Debit Card Abuse? FROM SEPTEMBER

http://www.nakedcapitalism.com/2009/09/the-debit-card-mystery.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



This blog normally steers clear of the consumer finance space, except when it is amusing or has macroeconomic effects. But once in a while I cannot contain myself.

Why does anyone have a debit card? I am deadly serious about this question. Not long ago, I switched banks, going from one end of the spectrum to the other. I had been with US Trust, which has great service if you are doing anything complicated and can live with their 9-5 schedule, but costly if your needs are more plain vanilla. They were bought by Bank of America, the good people all left, and I figured if I was going to be with a regular retail bank, I might as well go with one that was cheap, had 24/7 service and good branch hours, and I wound up at Commerce Bank, now TD Bank.

Commerce tried foisting a debit card on me. It took some doing to get an ATM card instead. I do not know why people use debit cards, so perhaps readers can explain this mystery to me.

If your wallet is stolen, someone can pretty quickly drain your account and even go into overdraft. Unlike credit cards, where your losses are limited, you have no recourse. Having had my wallet taken more often than I care to recount and having had the perps run up truly impressive credit charges charges in a mere 10 minutes the last instance (they seem to be getting more savvy over time), the last thing I would want to carry is a debit card. The ATM pin affords you some protection; you have none with a debit card.

Now that would seem to be a sufficient reason not to carry a debit card. Then we have the fact that banks charge particularly aggressive over-limit fees on debit cards. From the New York Times:

When Peter Means returned to graduate school after a career as a civil servant, he turned to a debit card to help him spend his money more carefully.

Peter Means’s bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward.

So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward. He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee. All told, he owed $238 in extra charges for just a day’s worth of activity.

Mr. Means, who is 59 and lives in Colorado, figured employees at his bank, Wells Fargo, would show some mercy since each purchase was less than $12. In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear. But they would not budge…

This year alone, banks are expected to bring in $27 billion by covering overdrafts on checking accounts, typically on debit card purchases or checks that exceed a customer’s balance.

In fact, banks now make more covering overdrafts than they do on penalty fees from credit cards.

I don’t get it. Debit cards are inferior to ATM cards (less security) and in some cases, higher fees (at my bank, if you have a line of credit established, you do not incur an overdraft charge if you go into the credit line). So why does anyone have a debit card? Is this a perverse example of behavioral economics, where the bank offers the worst “opt in” alternative (debit card) and consumers have to take the energy to opt out and get the better products?

And these debit cards, which ten years ago were deemed to be losers for the industry, have been redesigned into cash cows:

Debit has essentially changed into a stealth form of credit, according to critics like him, and three quarters of the nation’s largest banks, except for a few like Citigroup and INGDirect, automatically cover debit and A.T.M. overdrafts.

Although regulators have warned of abuses since at least 2001, they have done little to curb the explosive growth of overdraft fees. But as a consumer outcry grows, the practice is under attack, and regulators plan to introduce new protections before year’s end. The proposals do not seek to ban overdraft fees altogether. Rather, regulators and lawmakers say they hope to curb abuses and make the fees more fair.

Yves here. But we are already getting the usual defenses:

Bankers say they are merely charging a fee for a convenience that protects consumers from embarrassment, like having a debit card rejected on a dinner date. Ultimately, they add, consumers have responsibility for their own finances.

“Everyone should know how much they have in their account and manage their funds well to avoid those fees,” said Scott Talbott, chief lobbyist at the Financial Services Roundtable, an advocacy group for large financial institutions.

Yves here. I bet you he does not keep a running balance on his checking account. Back to the story:

Some experts warn that a sharp reduction in overdraft fees could put weakened financial institutions out of business.

Michael Moebs, an economist who advises banks and credit unions, said Ms. Maloney’s legislation would effectively kill overdraft services, causing an estimated 1,000 banks and 2,000 credit unions to fold within two years. That is because 45 percent of the nation’s banks and credit unions collect more from overdraft services than they make in profits, he said.

Yves here. Garbage in, garbage out. Does not distinguish between debit card overdrafts and check overdrafts. The two are mingled. Back to the story:

For years, banks had covered good customers who bounced occasional checks, and for a while they did so with debit cards, too. William H. Strunk, a banking consultant, devised a program in 1994 that would let banks and credit unions provide overdraft coverage for every customer — and charge consumers for each transgression.

“You are doing them a favor here,” said Mr. Strunk, adding that overdraft services saved consumers from paying merchant fees on bounced checks.

Yves here. Favor? Banks are not in the favor business. This is an insult to the reader’s intelligence. Here is a key bit:

But many of the nation’s banks have found that overdraft fees are easy money. According to a 2008 F.D.I.C. study, 41 percent of United States banks have automated overdraft programs; among large banks, the figure was 77 percent. Banks now cover two overdrafts for every one they reject…

Most of the overdraft fees are drawn from a small pool of consumers. Ninety-three percent of all overdraft charges come from 14 percent of bank customers who exceeded their balances five times or more in a year, the F.D.I.C. found in its survey. Recurrent overdrafts are also more common among lower-income consumers, the study said.

Just wait. The next argument in defense of these practices will be that it is cheaper than payday lending.

NOW THAT STEPS HAVE BEEN TAKEN TO RIGHT THIS WRONG, DEBIT CARDS JUST BECAME A LOT LESS ABUSIVE (ASSUMING IT'S HAPPENED--HARD TO KEEP TRACK).

[Demeter]

6. THE BANKSTERS LINEUP

If it's greed, it goes here...

[Demeter]

7. (BOA) Bank Firing of Counsel Is Examined (FROM SEPTEMBER)

http://www.nytimes.com/2009/09/09/business/09bank.html?_r=1&ref=business

Four days after Bank of America shareholders voted to approve a merger with Merrill Lynch, Timothy J. Mayopoulos, the bank’s general counsel, was summoned to an executive suite.

There, Bank of America’s chief risk officer told Mr. Mayopoulos that he was no longer needed at the company, but she gave no explanation of the unexpected dismissal, according to two people briefed on the meeting.

Now, the timing of Mr. Mayopoulos’s dismissal is coming under a spotlight as Attorney General Andrew M. Cuomo of New York and other federal investigators examine why the bank’s executives did not tell shareholders about billions of dollars worth of bonuses as well as huge losses at Merrill Lynch before the deal.

Mr. Mayopoulos was let go the day the bank informed its board that Merrill was bleeding money at an unexpected pace. He was immediately escorted from the building without being permitted to return to his office, the people with knowledge of situation said. His dismissal came six days after Mr. Mayopoulos spoke with the bank’s chief financial officer about mounting losses at Merrill Lynch, which were not disclosed to shareholders before the deal closed.

“I’d like to know why he was dismissed,” said Charles M. Elson, a Bank of America shareholder and a professor of corporate governance at the University of Delaware. “If he was terminated because of disagreements on disclosure on Merrill, that’s relevant. It goes right back to the effectiveness of management. You can always disregard a general counsel’s advice, but the question is, Why did you?”

As general counsel, Mr. Mayopoulos was responsible for advising the bank on its disclosure decisions. It is unclear how he advised executives to handle the information on Merrill’s bonuses and losses, which some shareholders later said would have changed their mind about approving the merger.

In testimony to Mr. Cuomo’s staff in August, Mr. Mayopoulos cited legal ethics rules and declined to provide specifics on the advice he gave the bank. Mr. Cuomo asked the bank in a letter Tuesday to grant Mr. Mayopoulos and the bank’s other lawyers permission to respond. By invoking the confidentiality of legal advice, Bank of America was “hindering this office’s ability to make fair and fully informed decisions as to what charges, if any, to bring and whether individual Bank of America officers should be charged,” Mr. Cuomo’s office wrote.

Bank of America has also cited attorney-client privilege in a separate case involving the Securities and Exchange Commission, with which the bank recently reached a $33 million settlement over disclosure issues. A federal judge who has blocked the settlement has also tried to get the bank to reveal more on the role played by Mr. Mayopoulos and the bank’s other lawyers, and the bank and the S.E.C. will file new documents with that judge on Wednesday. The chairman of a Congressional committee investigating the merger has also asked the bank to reveal documents related to these legal discussions.

In testimony to Mr. Cuomo’s staff, Joe L. Price, the chief financial officer, said he relied on Mr. Mayopoulos’s advice on Dec. 3, the day before the shareholder vote, for the bank’s decision not to disclose Merrill’s mounting losses. Mr. Mayopoulos responded to Mr. Cuomo’s staff that he in turn had spoken with outside counsel about the matter. The bank’s outside law firm was Wachtell, Lipton, Rosen & Katz. Merrill Lynch worked with Shearman & Sterling. Both firms declined to comment.

Kenneth D. Lewis, Bank of America’s chief executive, told Mr. Cuomo’s office this spring that Mr. Mayopoulos’s dismissal came at a time when the bank “had more executives than we needed because of this merger.”

The bank chose one of its own executives, Brian T. Moynihan, over Merrill Lynch’s general counsel to fill the vacancy. Mr. Moynihan held the position for about a month before being shifted to head the bank’s investment banking unit.

The departure of Mr. Mayopoulos, whose family still lives in Charlotte on the same street as Mr. Lewis, surprised executives at Merrill Lynch who had been meeting with him for weeks to figure out how the combined legal department would be arranged. He was involved in such a meeting when he was called in and dismissed, two people briefed on those discussions said.

Bank of America issued a statement that said it had not in fact defended itself by saying it relied on its lawyers. The bank said it believed it had followed disclosure rules.

Mr. Mayopoulos is now the general counsel of Fannie Mae. In a Feb. 2 recommendation letter provided by his lawyer, Ed Hinson, the bank said he had served “with distinction throughout his tenure with the company.”

“The amazing thing about a guy like him is however he’s treated, he’ll do his duty,” Mr. Hinson said. “He’s not going to reveal confidential information.”

[Demeter]

12. When Wall Street nearly collapsed

http://money.cnn.com/galleries/2009/fortune/0909/gallery.witnesses_meltdown.fortune/index.html

30 VIGNETTES FROM THAT FATEFUL DAY IN SEPTEMBER OF 2008...FOR NOSTALGIA BUFFS

[UpInArms]

41. only made it through 6 of 30 before I started uncontrollable

barking barfing.

:D

[Tansy_Gold]

45. .

:rofl:

(Tansy Gold just loves her some good puns!)

[Demeter]

22. FSA swoop hauled in government adviser

http://www.ft.com/cms/s/0/3a229fd6-377e-11df-88c6-00144feabdc0.html

The Deutsche Bank executive arrested on Tuesday in connection with an insider dealing investigation was one of a team of bankers advising the UK government on managing its stakes in Royal Bank of Scotland and Lloyds Banking Group, the Financial Times has learnt.

The Deutsche unit, which is being led by Anshu Jain, co-head of the German bank’s investment banking operations, comprises more than a dozen bankers looking at strategic options for the part-nationalised lenders, according to people familiar with the set-up.

The executive, Martyn Dodgson, who was recently promoted to be a managing director at Deutsche, was part of the government advisory team.

The Financial Services Authority on Wednesday said it had arrested a seventh man in connection with the investigation, which the market regulator called the UK’s biggest insider dealing case.

The FSA has refused to confirm the identities of those involved, but the FT has learnt that, in addition to Mr Dodgson, the suspects include: Clive Roberts, head of equities trading at Exane BNP Paribas; Julian Rifat, an equity execution trader at Moore Capital, one of the world’s largest hedge funds; Graeme Shelley, a trader at Novum Securities, the stockbroker; Iraj Parvizi, a director at Aria Capital; and Ben Anderson, whose employment could not be verified.

None of those arrested has been charged, and all are expected to be released on bail after questioning, the FSA said.

More than 140 officers carried out dawn raids on 16 addresses across London and the south-east on Tuesday after a near three-year investigation.

The FT has since learnt that some of the figures embroiled in the probe rank among the City’s best-connected and most colourful characters.

London’s hedge fund community is still reeling from news of the arrest of Mr Roberts, a former senior executive at RBS, who counts some of the City’s biggest hedge funds as clients.

Nicknamed “Del Boy”, former colleagues described him as a “larger than life” figure with a “wicked sense of humour”.

Mr Dodgson is also a high-profile figure in the world of corporate broking, having worked at five separate banks over the past decade, including Lehman Brothers, UBS and Morgan Stanley.

One former colleague described him as “a man in a hurry”, who had built up a substantial buy-to-let property empire stretching to many dozens of homes as a sideline to his career in banking.

Mr Parvizi is a speculator in small-cap stocks who has taken big stakes in companies including Gold Oil, Minerva and Futuragene in recent years.

None of those arrested could be reached for comment.

[Demeter]

55. FSA dawn raids rock City institutions

http://www.ft.com/cms/s/0/69af38ae-3670-11df-8151-00144feabdc0.html

Three prominent financial institutions, Deutsche Bank, Exane BNP and Moore Capital, were on Tuesday embroiled in the UK’s biggest insider dealing case yet after dawn raids at 16 locations led to the arrests of six people.

More than 140 officers from the Financial Services Authority swooped on premises across London and the south-east, seizing documents and computers from both Deutsche’s and BNP’s UK headquarters as well as Mayfair-based Moore Capital.

Three City professionals, including senior executives at Deutsche and Exane BNP (which is 50 per cent owned by France’s BNP Paribas) and a trader at Moore Capital, were among those arrested on suspicion of being involved in what the FSA called a “sophisticated and long-running” insider dealing ring.

UK regulators have stepped up their attack on insider dealing amid growing belief that high-profile enforcement cases provide the most credible deterrent to systemic market abuse.

Two weeks ago, the FSA won its first criminal conviction of a City professional for insider dealing when Malcolm Calvert, a retired Cazenove partner, was sentenced to 21 months for passing tips from a source at his former employer on to a friend who traded on the information.

The calibre of institutions involved in the raids, however, has already shaken the Square Mile. The FSA said they were its “largest ever operation against insider dealing” and followed an investigation launched in late 2007. People familiar with the investigation said formal charges were likely to be filed within two days.

Moore Capital, with $15bn under management, is one of the world’s largest and most influential hedge funds, founded 24 years ago by legendary trader Louis Bacon.

The full details of how the alleged dealing ring operated have yet to emerge. However, the FSA claims that the City professionals involved passed inside information to traders – either directly or via intermediaries – who made “significant profits” as a result.

People familiar with the investigation confirmed that Julian Rifat, a London-based equity execution trader at Moore, was arrested on Tuesday morning.

The Deutsche executive arrested was Martyn Dodgson, a managing director in the corporate broking department who worked previously at Lehman Brothers and Morgan Stanley, and who Deutsche said joined their bank 15 months ago.

Also arrested was Clive Roberts, head of European sales trading at Exane BNP, the French bank’s equities joint venture. “We confirm that an employee of the firm has been arrested,” Exane BNP said. “We are co-operating with the authorities.”

Deutsche also said it was co-operating with the FSA.

Mr Rifat was responsible for executing orders on behalf of Moore Capital’s portfolio managers. It is understood, however, that the FSA is investigating trades placed by Mr Rifat through his personal account, and that the hedge fund’s own capital is not involved.

“Moore is co-operating fully with the FSA in its investigation,” said the fund. “The employee has been placed on administrative leave pending completion of the investigation.”

[Demeter]

26. US employment data raise recovery hopes--UNCLE BEN'S TWO CENTS

http://www.ft.com/cms/s/0/27452d90-3808-11df-9e8e-00144feabdc0.html


...“If you’re out of work for six months or a year, then you begin to lose your skills,” Mr Bernanke told the House financial services committee. “You begin to become very unattractive to employers, and it’s clearly a long-term negative and not just a short-term negative.”...

OH REALLY, BEN? WHAT A LOAD OF HORSE MANURE

[Po_d Mainiac]

39. He meant outa work porn stars....That gained a bunch of extra pounds

And had silicone blowouts :hide:

[Demeter]

49. Fuld faces new probe on Lehman collapse

http://www.ft.com/cms/s/0/d61ccd14-351a-11df-9cfb-00144feabdc0.html

Dick Fuld, chief executive of failed Lehman Brothers, and regulators face a testing congressional hearing into the bank’s collapse next month after a report found a dubious accounting procedure helped the bank conceal the extent of its financial distress.

Mr Fuld has kept out of the public eye since a dramatic congressional hearing in 2008 where his grim expression, protesters’ placards and haranguing by lawmakers provided iconic images of the financial crisis.

He now faces another interrogation by lawmakers along with Tim Geithner, Treasury secretary, Ben Bernanke, chairman of the Federal Reserve, and Chris Cox, the former chairman of the Securities and Exchange Commission.

The hearing, which is tentatively scheduled for April, has been called by Barney Frank, chairman of the House financial services committee, following the publication of a report by Anton Valukas, a court-appointed examiner. The committee announced the hearing last week, after requests from Mary Jo Kiley, a Democatic representative from Ohio, and Spencer Bachus, the senior Republican on the House financial services committee, but did not reveal the witness list or timing.

The report highlighted Lehman’s use of so-called “Repo 105” transactions, which improved the ailing bank’s balance sheet by $50bn by classifying temporary repurchase agreements as permanent asset sales.

In a video interview for the Financial Times’ View from DC series, Mr Frank said he would accede to Republican demands to invite Mr Geithner, who was previously president of the New York Federal Reserve.

But he also accused the party of “amnesia” and said: “They forget that there were Bush administration officials doing this. So we will have Tim Geithner, but also Ben Bernanke and Chris Cox.”

Mr Bachus said Mr Bernanke had to explain a report in the FT which revealed that Merrill Lynch had warned the Fed and the SEC that Lehman might be incorrectly stating its liquidity position.

Mr Frank said he might also call Lehman directors to testify because he believed insufficient attention had been paid to failures of corporate governance.

“Board directors have been too little accountable here. The way boards of directors are functioning, it reminds me of what a late, great journalist, Murray Kempton, once said: ‘I’m an editorial writer; our function is to come down from the hills after the battle is over and shoot the wounded.’ They were supposed to have done something in advance. Firing a CEO after a disaster is not a very good thing to do.”

Asked whether Mr Fuld would voluntarily appear and whether he would answer questions, his lawyer reissued a statement that said he was not involved with the Repo 105 transactions and had always worked diligently for Lehman stakeholders.

On Monday the Senate banking committee begins the mark-up of a financial regulation bill designed to prevent a repeat of the collapse of Lehman and AIG bail-out, eventually to be merged with Mr Frank’s bill.

[Demeter]

50. Central banks woo sovereign funds over debt

http://www.ft.com/cms/s/0/5da5272a-35d1-11df-aa43-00144feabdc0.html

Central banks and debt management offices are on a charm offensive with sovereign wealth funds in an effort to secure a ready market for the large amount of government debt that will have to be raised in the next few years.

Officials from across the world have begun informal meetings about investment and asset allocation, according to people familiar with the process.

At a recent gathering in Frankfurt – arranged by the Official Monetary and Financial Institutions Forum (Omfif), an organisation set up to bring SWFs and central banks together – more than 50 central banks, sovereign funds and asset managers were represented.

“A lot of government bonds being issued at the moment are being bought by sovereign wealth funds. It makes sense for these people to get together,” said one person at the meeting, which was hosted by the Bundesbank.

Talks are planned in Kuala Lumpur and then elsewhere in Asia, the Middle East and Africa. Omfif’s advisory board is chaired by Lord Desai, emeritus professor at the London School of Economics.

The world’s top 10 SWFs – led by the likes of the Abu Dhabi Investment Authority (Adia) – have more than $3,000bn (£2,000bn, €2,200bn) in assets, according to the SWF Institute, with oil and other trading wealth swelling those coffers by hundreds of billions of dollars a year.

Early in the financial crisis, many SWFs, including funds from Abu Dhabi, Qatar and Singapore, invested heavily in bank stocks, in some cases getting badly burned. Adia is in dispute with Citigroup over its 2007 investment in the then desperate US bank.

As risk appetites waned during 2008 and 2009, large SWFs increased their holdings in government bonds, in line with expanding issuance volumes.

It is impossible to pin down how much sovereign wealth money is going into such bonds, although Adia said last week, in its first annual review, that its benchmark asset allocation for government bonds was 10-20 per cent. It is understood to have erred towards the higher end of that range for the past couple of years. Adia’s total assets are estimated at up to $450bn.

The SWF community has been cautiously opening up to the world in recent months, recognising that the funds must be more transparent if they are to be accepted as mainstream investors.

The International Monetary Fund has pushed the development of “best practices” for SWFs to improve their transparency and governance. Funds began adopting the guidelines – known as the Santiago Principles – 18 months ago.

Informal gatherings of central bankers, debt management officials and sovereign wealth funds, such as those organised by Omfif, also aim to act as a way of exchanging ideas on investment strategy.

Many of the central banks represented are running budgetary surpluses and feel they can learn from the best SWFs.

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51. Geithner says US could lose regulation role

http://www.ft.com/cms/s/0/d6c83664-3604-11df-aa43-00144feabdc0.html

Tim Geithner, US Treasury secretary, warned lawmakers on Monday that “America will lose this opportunity to set the global agenda” on financial regulation if Congress fails to complete passage of legislation to reform oversight of the financial system.

He spoke just as the Senate banking committee voted out a financial regulatory bill without the Republican support necessary for the legislation to pass a final vote in the Senate, but Republicans offered hope that they could eventually reach agreement after the Easter break.

The comments from Mr Geithner come after a bruising few weeks of diplomatic back-and-forth with European officials over a proposed new directive that the US worries would discriminate against its financial companies.

In a speech tailored to his audience at the conservative American Enterprise Institute, Mr Geithner cited previous policies and statements from President George W Bush and Richard Shelby, the Republican senator, which he said helped make the case for reform in a way both parties could support.

He noted that the troubled asset relief programme was now set to prove far less expensive than the original $700bn pricetag allowed. “We’re putting Tarp out of its misery having used only a fraction of the resources authorised by the Congress and having returned almost $200bn,” he said.

Chris Dodd, the Senate banking committee chairman, on Monday raced through the mark-up stage of the landmark financial regulation bill, leaving unanswered questions about a final product – ranging from the powers of a consumer financial protection bureau to new rules on derivatives trading.

Hours after a victory for President Barack Obama’s healthcare reform, the committee put aside the partisan rhetoric from Congress over the previous 24 hours and Republicans declined to prevent the regulation overhaul from advancing to the next stage.

“I remain optimistic,” said Mr Shelby, the senior Republican on the committee. He still harboured “hopes of reaching a broad consensus” on reform in spite of objections to parts of Mr Dodd’s bill.

Talks to craft a bipartisan bill had failed to produce agreement over which corporate end-users of derivatives should be exempt from new rules that require most trades to pass through a central clearing house.

A consumer agency remains another sticking point, with banks pressing senators to alter a provision that would allow individual states to enforce new rules and to prevent the potential for conflicts between new consumer edicts and instructions from a company’s prudential regulator.

[Demeter]

52. UBS blow as global equities chief quits

http://www.ft.com/cms/s/0/bb90238c-35e3-11df-aa43-00144feabdc0.html

UBS’s global head of equities has quit the Swiss bank, dealing a heavy blow to an institution that is investing huge sums to rebuild its battered investment banking business in the aftermath of the financial crisis.

Daniel Coleman, who joined UBS in 1986 as a graduate trainee at its Chicago-based O’Connor business, is stepping down immediately. His responsibilities have been handed to Neal Shear, the bank’s global head of securities, according to an internal memo circulated on Monday.

Mr Coleman will remain as a senior adviser for the “next few months” before taking up “a new challenge” in the industry, the memo said.

UBS’s equities franchise has been one of the bright spots for an institution that lost hundreds of senior investment bankers during the downturn.

However, the business has ceded ground to rivals amid ­concerns about the extent of the bank’s problems.

UBS lost the most market share in global equities over the crisis as measured in revenues, dropping from a near 10 per cent share in the first half of 2007 to 6.4 per cent in the second half of 2009, according to a recent report from Morgan Stanley and Oliver Wyman, the consultancy.

Total revenue from equities sales and trading dipped 4.8 per cent to SFr4.9bn ($4.6bn) in 2009 compared with SFr5.18bn in 2008, according to UBS’s fourth-quarter results.

Oswald Grübel, the former Credit Suisse chief executive brought in last year to restore the bank’s fortunes, has repeatedly insisted that rebuilding the business and, in particular, its harder-hit fixed income operations, was a top priority.

Mr Coleman was known to be dispirited after losing dozens of employees last year, when UBS paid its bankers significantly less than Wall Street and European rivals. He first mooted the possibility of leaving as long as 15 months ago, according to people familiar with the situation.

UBS insisted on Monday night that its bench of bankers specialising in equities remained “deep”.

“Clearly it is sad that Daniel is leaving but after such a long time it is understandable that he would like to move on,” said one long-serving executive.

Mr Shear, a former senior banker at Morgan Stanley, joined UBS in January as part of a reorganisation of the Swiss bank’s trading operations.

IS THIS THE BEGINNING OF THE END FOR THE BOYS FROM CHICAGO?

[Demeter]

59. ‘Enormous’ adviser fees spark warning

http://www.ft.com/cms/s/0/801639d2-35fb-11df-aa43-00144feabdc0.html

The “enormous” fees paid to investment banks for advising companies on deals might be skewing the outcome of takeovers, the UK’s leading group of institutional shareholders has warned.

The Association of British Insurers said companies and regulators needed to take a close look at the advisory arrangements. The fees were a “deadweight cost” on shareholders that could swallow a significant part of savings derived from mergers and acquisitions.

“There is a strong case for not only more transparency but also for more accountability,” the ABI said in a wide-ranging letter to Lord Mandelson.

The letter was prompted by a Mansion House speech by the business secretary this month calling for a fresh look at the UK’s takeover regime in the wake of Kraft’s £11.6bn takeover of Cadbury last month.

Lord Mandelson suggested a raft of reforms while urging shareholders to focus on the long-term value of a bid rather than chasing “the fast buck” during takeovers.

The ABI rebutted criticism that institutional shareholders had been short-term in outlook and called for a debate on factors that had weakened incentives for long-term ownership of equities, such as European rules on solvency for insurers, pension fund accounting and dividend taxation.

“Put simply, at the moment there are not enough long-term shareholders to provide the degree of stability and good governance you would like to see,” the ABI said.

However, the association agreed with Lord Mandelson’s call for more transparency over fees for bankers and advisers.

“There should be a close look at the incentives created by the existing fee and advisory arrangements which may tilt the market in favour of com­pleting a deal and limit the availability of independent advice,” it said.

The Office of Fair Trading said last week it would look at investment banks’ fees.

Investors’ concerns over incentives were sparked last month when Kraft paid out about $390m in fees, including financing costs, bankers and lawyers; while Cadbury paid its three advisers – Morgan Stanley, Goldman Sachs and UBS – between $50m and $56m, according to Thomson and Freeman estimates.

Cadbury’s bankers were on an incentive fee and earned more for selling the company than if it had stayed independent.

[Demeter]

8. THE MORTGAGE MARKETEERS

ANOTHER CATEGORY WE COULD HAVE LIVED WITHOUT...

[Demeter]

9. More mortgage servicers will be sued: Ohio attorney general (SEPTEMBER)

http://www.reuters.com/article/idUSTRE5876QD20090908

Ohio Attorney General Richard Cordray said on Tuesday he is plans to sue more mortgage companies over dealings with troubled homeowners in an effort to break the foreclosure crisis.

Housing Market

"We're not looking for charity, what were looking for is good, solid customer service for Ohio's homeowners," he told Reuters in an interview. "Foreclosures lead to abandoned homes that bring additional costs that have to be paid by our communities, not the mortgage companies and not the servicers."

"They (mortgage companies) know they won't have to bear those costs and they don't give a hoot," he added.

Cordray said his investigations of mortgage servicing companies have extended beyond that of Carrington Mortgage Services, which he sued in July for failing to make good faith efforts to prevent foreclosures, and incompetence.

Ohio's Attorney General said he could not disclose the names of companies that are likely to be sued as investigations by his office are still in progress. Cordray added that he has informed the possibility of further lawsuits with the U.S. Treasury Department and Justice Department and said they "welcomed" the impetus this may provide for other mortgage servicers to improve their loan modification procedures.

Ohio, which had the 12th highest foreclosure rate in the nation for the first half of 2009, is pursuing the worst offenders first in the hopes that others will improve practices on their own in order to escape litigation, Cordray said.

"We'd rather not sue everyone, but we will if we have to," he said. "If we have to sue a dozen of them, then we'll sue a dozen."

"If that's the kind of policing we have to do then we're glad to do it," he added.

Servicing companies have found themselves at the forefront of the battle to curb the home foreclosures that helped push the economy into recession, and are threatening to stall a nascent recovery. Their practices of collecting payments and easing loan terms where possible have drawn increased scrutiny in recent months amid signs that foreclosures are rising despite their efforts.

A slow response by servicers over President Barack Obama's Home Affordable Modification Program (HAMP) has also led to a rebuke by the U.S. Treasury.

Cordray said the discovery process in court would allow his office to more closely examine servicers procedures. Whether it be incompetence or greed -- through charging excessive fees for handling loan modification requests -- servicers have not yet hired enough people to provide sufficient customer service to stricken homeowners, he added.

"I think we will then have a better sense of whether their representations (about helping homeowners) are accurate," he said.

Cordray said his office has received "hundreds, if not thousands of complaints" from home owners over endless fees and appalling customer service -- phone calls not being returned, documents going missing and servicers reneging on promises to modify individual loans.

In Carrington's case, Cordray alleged the Santa Ana, California-based company broke an agreement with Ohio to resolve a dispute over the state's litigation against New Century Financial Corp., a defunct subprime lender.

Carrington said in July after the lawsuit was announced that it remained committed to helping U.S. homeowners.

Carrington's parent, Carrington Capital Management, purchased New Century's servicing unit in 2007.

But Cordray said that in general mortgage companies have not lived up to their public promises to help stricken borrowers.

"We want to make sure servicers are not just paying lip service to the loan modification process," he said. "We want them to show enough commitment."

[Demeter]

10. Principal forgiveness 'reignites' home-equity loan debate

http://www.marketwatch.com/story/principal-forgiveness-reopens-home-equity-debate-2010-03-26?siteid=YAHOOB

Efforts this week to start forgiving billions of dollars in principal on underwater mortgages have reopened a sensitive debate in the U.S. banking industry.

Before first mortgages can be dramatically modified in such a way, any home-equity loans that stand behind those assets have to undergo painful changes too. In theory, these second liens may have to be wiped out before principal on first mortgages is cut.

U.S. banks have roughly $1.5 trillion of residential mortgages on their balance sheets, but they also hold another $600 billion or so of home-equity loans, according to Barclays Capital data.

The prospect of having to write off a chunk of that $600 billion may be making some banks reluctant to cut principal on first mortgages.

But pressure is mounting. Earlier this week, Bank of America Corp. unveiled a plan to cut up to $3 billion of mortgage principal, and on Friday the White House launched a new effort to promote principal forgiveness. Read about the new government push.

Bank of America's "program is focused on first lines, but it will also reignite the investor debate on where home equities are marked," Richard Ramsden, a bank analyst at Goldman Sachs, wrote in a note Thursday.

Goldman estimates that banks have marked their home-equity loans at 86 cents on the dollar, compared with 88 cents on the dollar for first mortgages.

Bank of America, J.P. Morgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. hold roughly 40% of home-equity loans, but some regional banks are also highly exposed, according to Ramsden, including First Horizon National Corp., PNC Financial Services Group Inc., SunTrust Banks Inc., Huntington Bancshares Inc. and Regions Financial Corp.

Frank liens on banks

In early March, Rep. Barney Frank, chairman of the House Financial Services Committee, sent a letter to the chief executives of Bank of America, J.P. Morgan, Wells Fargo and Citigroup, urging them to acknowledge the true value of their home-equity loans.

"Large numbers of these second liens have no real economic value -- the first liens are well underwater, and the prospect for any real return on the seconds is negligible," Frank wrote. "Yet because accounting rules allow holders of these seconds to carry the loans at artificially high values, many refuse to acknowledge the losses and write down the loans."

Aid for homeowners

Unemployed homeowners will get a few months of relief on their mortgages in a new government assistance plan to help stall more foreclosures, James Hagerty reports on the News Hub.

Without such write-downs, principal on first mortgages can't be reduced -- even if the holders of these first liens want to bite the bullet and take the loss, he argued.

"The four organizations you lead are major participants in the second-lien market. Failure to modify these debts has become a major and unnecessary obstacle to thousands of Americans being able to stay in their homes," Frank said in his letter. "I urge you in the strongest possible terms to take immediate steps to write down these second mortgages and allow principal-reduction modifications of the underlying first liens to take place. If there are legal obstacles to your doing so, we will work with you to remove them."

The Treasury Department's latest plan to promote principal forgiveness includes incentives to persuade banks to extinguish or partly extinguish any home-equity loans standing behind first mortgages.

Banks will be paid 6 cents for every dollar they forgive on home-equity loans. To get that payoff, these second loans must be more than six months' delinquent. However, it doesn't matter what the loan-to-value ratios are on the loans, the Treasury said.

[Demeter]

11. Take two: Gov't tries new fix for mortgage crisis

http://news.yahoo.com/s/ap/20100326/ap_on_bi_ge/us_mortgage_aid

The government's bold new plan to stem the foreclosure crisis aims to succeed where previous efforts have fallen flat. Yet just as before, the odds are long, and many struggling borrowers won't qualify.

In theory, the effort unveiled Friday would help millions of troubled homeowners who owe more on their mortgages than their homes are worth, or who are jobless and need a break on their payments.

But it depends on cooperation from investors and bankers, many of whom have been locked in disputes over whether to reduce the debt owed by homeowners.

And just like the bank bailouts, this rescue plan poses risks. If it doesn't slow the wave of foreclosures or if home prices nosedive, the tentative recovery in the housing market could fizzle.

The Obama administration says the plan will help stabilize the real estate market by keeping many borrowers out of foreclosure. If it succeeds, the plan would limit damage to the overall economy.

The new effort is designed to help two groups:

• Borrowers who owe more on their loans than their houses are worth. More than 15 million homeowners fall into this category, according to Moody's Analytics. About 10 million of them owe at least 20 percent more than their house's current value.

Their mortgage companies can cut the total amount they owe, or they can refinance into loans backed by the Federal Housing Administration. FHA will get $14 billion in incentive money from the federal bailout fund.

• Unemployed borrowers. People receiving unemployment benefits would have their mortgage payments cut to no more than 31 percent of their monthly income for three to six months.

That's intended to give homeowners more time to find a job. Once they do, they may qualify for a loan modification that would permanently reduce their payments under the administration's existing $75 billion loan modification program.

The plan aims to help 3 to 4 million borrowers avoid foreclosure — the same target the administration tried to reach with its original plan last year. Even with the changes, the effort will likely prevent no more than 1.5 million foreclosures, estimates Mark Zandi, chief economist at Moody's Analytics.

Disputes among banks and investors, who would have to approve any cuts in loan principal, could prevent the effort from stopping more foreclosures, as could another drop in home prices.

"Practically speaking, this is probably going to prevent foreclosures. But I don't think they're ever going to reach 3 to 4 million homeowners," said Chris Mayer, a real estate professor at New York's Columbia Business School. "These plans always turn out to be harder than we think."

The administration's existing program to prevent foreclosures hasn't made much of a dent in the foreclosure crisis. A lack of planning and shifting rules on who qualifies produced a huge backlog in the program, the special inspector general for the federal financial bailout fund told lawmakers this week.

Still, analysts said this effort has a better chance of success than past efforts because it would reduce principal for some struggling borrowers — a method more effective at helping homeowners than reducing interest payments or other forms of aid. Laurie Goodman, a widely followed mortgage securities analyst with Amherst Securities Group, called it "a huge step forward."

The plan comes after pressure from the administration's Democratic allies in Congress to intensify efforts to help Americans at risk of losing their homes.

The overhauled plan came together after several months of negotiations between the Treasury Department, major banks and investors in mortgage securities. A major sticking point so far has been getting everyone involved to agree on restructuring loans.

The problem is that most of the troubled mortgages aren't owned by the banks themselves. They were bundled into securities during the housing boom and sold to investors.

To reduce principal payments on those mortgages, banks often must get permission from the investors who hold the securities — and may not be willing to take less.

Banking industry officials were optimistic that investors would negotiate.

"You have two choices: Modify the mortgage and help a borrower stay in their home or possibly get nothing if they foreclose," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, an industry group.

The plan risks angering Americans like Jim Truschel, a homeowner in La Mirada, Calif., who said he was disappointed the government is spending taxpayer money on another homeowner bailout effort.

"I feel very sorry for the people that are in these situations, but they have to be somewhat to blame themselves," said Truschel, a retiree. "They should have realized that they were getting into things that they weren't going to be able to pay for."

The administration says irresponsible borrowers will not benefit. The plan will not help investors, speculators or "Americans living in million-dollar homes or defaulters on vacation homes," an administration fact sheet said.

Diana Farrell, a White House economic adviser, acknowledged the plan won't prevent many of the expected 10 to 12 million foreclosures expected over the next three years. Doing so, she said, "wouldn't be fair, it would be too expensive and we probably wouldn't succeed in any case, because many people got into homes that they simply cannot afford."

Rep. Barney Frank, chairman of the House Financial Services Committee, praised the new steps, particularly giving jobless borrowers a break on their payments for three to six months.

"The whole economy is hurt by these foreclosures," Frank said.

For taxpayers, the government's plan carries some risk. Lenders will probably sell their most troubled loans to the FHA so they can be insured against default, said Mayer of Columbia Business School. Experts have warned that the FHA faces rising losses from foreclosures and might need a bailout.

"There's more risk to taxpayers," Mayer said. "There's a big incentive for lenders to give the government the worst of their loans, the ones they fear they won't get paid back on."

One "underwater" homeowner, Joe Clarke, a police officer in Oxnard, Calif., welcomed word of the plan. He owes $390,000 on his home, which is only worth about $250,000, and he fears his adjustable-rate loan will reset to a higher rate in August.

"I've made my payments," he said. "I didn't walk away from my house. I'm just not being afforded the opportunity to refinance my home, even at the current value, without taking the principal off."

[Demeter]

13. EUROPE COMMON MARKET OR NOT

IN THE INTERESTS OF BEING ORGANIZED (NO COMMENTS ON MY LIVING ROOM, PLEASE!)

[Demeter]

14. Germany's payroll bailout pays political dividends (SEPTEMBER)

http://v1.theglobeandmail.com/servlet/story/GAM.20090908.GERMANY08ART2236/TPStory/TPComment

The long row of precision computer-controlled milling machines stands silent and almost inactive on the floor of Klaus Reucker's metal-parts factory in Spandau, on the edge of Berlin - a sad testament to the crippled economy.

When parts orders from automotive and construction-equipment companies slowed to half their normal value earlier this year, Mr. Reucker knew his sales could no longer support all 41 employees, most of them skilled machinists. Half of his big machines fell silent, and the workers waited as he drew up a plan for layoffs.

That, for him, was heartbreaking: He had worked his way up from the assembly line to owning his own small company, and considered the workers his friends. To cast them into the murk of joblessness in the midst of a recession went against his principles.

As it turned out, Mr. Reucker never had to carry out the firings, even though his orders are still paltry enough that half of his huge machines remain silent.

Like thousands of other German companies, Mr. Reucker's shop has struck a bargain with Chancellor Angela Merkel's government: He will pay his 10 unneeded workers one-third of their salary for six months, after which Berlin will pay them, at 60 per cent of their original wage, to stay on the company's employment roster as part-time workers whether they work or not.

Germany now has close to 1.5 million workers employed on this scheme, known as the kurzarbeit, or "short work," at a cost of $9-billion to the government and $7.5-billion to German companies.

While other countries were bailing out major companies by purchasing their shares and debt or taking ownership stakes, the German government took a different tack this year, bailing out payrolls instead, in order to keep layoffs and large-scale unemployment at bay and stave off the personal bankruptcies and home foreclosures that would result.

The result has been a political dividend for Ms. Merkel, whose ruling Christian Democrats face a Sept. 27 national election. In 2005, she was swept to office after a sharp rise in unemployment levels forced then-chancellor Gerhard Schroeder, a Social Democrat, to call an election.

This time around, she can boast that unemployment has held steady for two straight months, at 7.7 per cent, below the Eurozone average of 9.5 per cent. Without the kurzarbeit, Germany would have seen unemployment rise.

It has also turned the attention of world governments to Germany, where some forecasters believe the economy is recovering faster than among its neighbouring countries. If growth can resume next year, Ms. Merkel's payroll-boosting scheme will have paid off, saving the country from the worst effects of the downturn.

In neighbouring countries such as France and Britain, forecasters warn that a recovery in economic activity is likely to be followed by a sharp spike in unemployment, which could pull the whole economy back down. The German model, despite its large fiscal cost, suddenly seems tempting.

"It is a kind of a gamble," says Eugen Spitznagel of the government labour-market analysis institute IAB. "We have evidence that there are large levels of labour hoarding ," and if the economy does not expand, it could lead to a crisis."

But Mr. Spitznagel has co-authored a study that shows the gamble appears to be paying off. In a large-scale survey of firms, it shows that layoffs will be balanced by equal numbers of hires during the next 12 months. Other recent studies have shown a sharp rise in investor confidence and a return of consumer spending, leading many economists to predict that Ms. Merkel's investment in the labour force will pay off.

But the stakes remain high. If growth remains stagnant beyond the end of 2010, Ms. Merkel will be caught with millions of workers on the government payroll, and will face either a massive wave of sudden layoffs, or the need to put those workers on more or less permanent state semi-employment. As Germany is already facing government debt levels approaching 70 per cent of the national economy, both options would be devastating.

This has led a number of German figures to warn that the kurzarbeit is a form of economic Russian roulette.

"The massive use of kurzarbeit has led to a backlog of job cuts," Axel Weber, president of Germany's national bank, the Bundesbank, warned this summer. And Ralph Wiechers, chief economist of Germany's engineering organization, warned that "kurzarbeit is a sweet poison," one that is causing German companies to become addicted to levels of employment they can't afford on their own.

But the more optimistic predictions held by most economists have caught the attention of other European nations. Ms. Merkel's policy is, in many ways, a complete reversal of everything they have been doing for the past decade and a half.

As recently as 2008, Germany was widely described as a country with a dangerously flawed set of labour laws. Other countries, such as neighbouring Denmark, had adopted "flexicurity" systems that allowed companies to hire and fire workers quickly and easily and provided robust short-term unemployment insurance schemes to support people at close to full pay between jobs.

In Germany, it remained expensive and difficult to fire full-time workers. This led to a German unemployment rate far higher than other Western European countries, as companies avoided taking on workers who would become long-term obligations.

But now that conservative system appears to have saved the German work force from a difficult time in the woods. Employers are doing everything they can to hold on to workers, even though the kurzarbeit program is somewhat more expensive than the cost of a layoff, because they believe that it will be hard to find qualified workers when the economy picks up again.

"The larger problem for Germany, once this period of recession is over, is not unemployment but labour shortages," says Mr. Spitznagel, who points to his country's aging population and ultra-low birth rates.

"Last year, the size of the labour force shrank by 150,000 workers - that is what is on employers' minds."

******

The unemployment effect

While other countries were bailing out major companies, Germany bailed out payrolls instead in order to keep unemployment low.

France: 9.8%

United States: 9.4%

Canada: 8.9%

Germany: 7.7%

[Demeter]

21. Eurozone divisions hit single currency

http://www.ft.com/cms/s/0/114524a8-3783-11df-88c6-00144feabdc0.html

The euro came under heavy pressure on Wednesday, falling to a 10-month low against the dollar, as doubts intensified about the 16 eurozone member states agreeing on financial assistance for Greece – and Portugal suffered a credit downgrade.

Sentiment soured towards the European single currency after Fitch, the rating agency, downgraded Portugal’s credit rating to AA- from AA, citing “significant budgetary underperformance in 2009” and “structural weaknesses” in its economy.

The decision revived fears in financial markets about the danger of contagion from Greece’s debt crisis.

The yield on Greece’s 10-year bond rose 5 basis points to 6.40 per cent, while the yield on comparable Portuguese bonds rose 5 basis points to 4.35 per cent.

France said on Wednesday night that no agreement had been reached on holding an emergency summit of eurozone leaders to discuss the Greek crisis.

Germany is holding out against any deal on a rescue package until Athens has exhausted its options to borrow on the capital markets, and been forced to turn to the International Monetary Fund for assistance.

Nicolas Sarkozy, the French president, is no longer excluding IMF intervention, but called for eurozone states to retain control of any rescue deal.

Senior German officials insisted on Wednesday the subject was not on the agenda at the full 27-nation European Union summit to open in Brussels on Thursday, and that a eurozone meeting had not been proposed. But Paris thinks a eurozone meeting might be possible in Brussels late on Thursday night.

Camilla Sutton, currency strategist at Scotia Capital, said potential involvement of an international organisation to support a eurozone country weakened confidence in eurozone governments’ ability to support a fellow member state.

The European Commission and several eurozone members, including Spain, France and Italy, have argued that further delay in a deal for Greece would fuel market speculation against the euro and further force up yields on Greek bonds.

José Manuel Barroso, president of the European Commission, called for EU members to agree on a “mechanism” that could be used for Greece, but “only in case all other means to avoid a crisis have been exhausted”.

Both Mr Barroso and Herman Van Rompuy, president of the European Council, have been urgently seeking to bring a reluctant Germany on board.

[Demeter]

25. Ireland mired in recession in fourth quarter

http://www.ft.com/cms/s/0/00ab4d70-381e-11df-9e8e-00144feabdc0.html

Ireland fell deeper into recession in the fourth quarter of 2009, with the economy shrinking 2.3 per cent as a result of devastating floods in the west of the country and the continuing decline in building activity following the property market crash.

Output figures for the third quarter, which had shown a small increase in gross domestic product of 0.3 per cent – prompting predictions Ireland had come out of recession – were also revised downwards to a decline of 0.1 per cent.

Brian Lenihan, finance minister, on Thursday said the year-on-year GDP decline of 7.1 per cent was “marginally better” than the estimate at the time of the budget in December of 7.5 per cent.

Indeed, if the decline in new house building is stripped out, “GDP was roughly unchanged in the fourth quarter,” the minister said.

Economists however were more gloomy. Alan McQuaid, economist with Bloxham stockbrokers, said “not only did Ireland not come out of recession in Q3, but it actually went into a deeper downturn in the final quarter”.

He calculated the cumulative decline in GDP since the end of 2007 was a “staggering” 12.7 per cent, which he said was more than double the rate of the slowdown in the eurozone as a whole.

He pointed to weaker consumer demand – down a fifth over that two-year period – rather than declining trade performance as the main cause.

The stabilisation in the unemployment rate at around 13 per cent of the workforce, was “more a reflection of a pick-up in outward migration and reduced labour force participation rather than an underlying improvement in employment trends”, Mr McQuaid said....

Nonetheless, the property crash and related collapse in consumer spending continues to be a big drag on activity. Fixed investment, which captures housing activity, was down a massive 29.7 per cent in 2009, compared with a 15.5 per cent contraction in 2008.

Industry officials estimate the number of house completions in 2009 at 26,000, half the 52,000 built in 2008. With an overhang of 120,000 houses for sale or rent – and that does not include vacant houses – the rate of housebuilding in 2010 is expected to halve again.

At the height of the boom in 2007 there were 87,000 houses built in Ireland. This compares with England and Wales, an area with 13 times the population, where house building is running at about 150,000 units a year....

Consumer spending also fell sharply in 2009, down 7.2 per cent compared with a decline of 1 per cent in 2008.

Unlike many EU countries, the Irish slowdown was exacerbated by a contraction in government spending, which declined 1.2 per cent following the emergency budget in April.

The one bit of good news was that the current account deficit, a big problem in Greece and Spain, continued to decline, and now stands at 0.5 per cent of GNP, reflecting the fall in imports and the debt de-leveraging by households that enabled banks to reduce their foreign borrowings.

[Demeter]

28. Open skies deal leaves US rules intact

http://www.ft.com/cms/s/0/a1b7088c-383a-11df-8420-00144feabdc0.html

The US rebuffed European efforts to loosen contentious foreign ownership rules protecting US airlines that have been a sticking point in transatlantic aviation negotiations for years.

The European Union and US signed a draft agreement in Brussels on Thursday on the second stage of an open skies deal to open up access to each other’s airline markets.

Siim Kallas, the European Commission’s transport vice-president, hailed the deal and said “a process has been agreed” to begin tackling the constraints on foreign investment and market access.

However, John Byerly, the chief US negotiator, insisted that the US had made no commitments to change its ownership limits, which would require app­roval in the US Congress....

British Airways, which had urged the UK to rescind the 2007 open skies deal if the US ownership limits were not tackled, said: “We had hoped that the conclusion of the second-stage negotiations would have resulted in the immediate removal of restrictions on ownership and control of US airlines. We call on both sides to honour the firm commitments they have made in this agreement to further liberalisation, and to redouble their efforts.”

...US laws that restrict foreigners from owning more than 25 per cent of voting stock in US airlines have long prompted concern in the EU.

The EU itself allows just less than 50 per cent foreign ownership of its airlines.....

[Demeter]

31. Eurozone agrees to Greek rescue deal

http://www.ft.com/cms/s/0/63b7a52c-37f5-11df-9e8e-00144feabdc0.html

Eurozone leaders on Thursday night agreed a rescue package for Greece including assistance from the International Monetary Fund as well as bilateral loans from fellow euro-member states.

“We hope that it will reassure all the holders of Greek bonds that the eurozone will never let Greece fail,” said Herman Van Rompuy, president of the European Council. “If there were any danger, the other members of the eurozone would intervene.”

The agreement followed a breakthrough earlier in the day between France and Germany on the principles of a rescue.

Under the accord reached between President Nicolas Sarkozy and Chancellor Angela Merkel, Athens would, in the event of “very serious difficulties”, receive co-ordinated bilateral loans from its eurozone partners as well as IMF assistance, which France had previously resisted.

Mr Van Rompuy said it would be a joint mechanism between eurozone members states and the IMF. Mr Sarkozy said the proportion of funding would be one-third IMF and two-thirds eurozone.

Jean-Claude Trichet, president of the European Central Bank, who had expressed doubts about IMF involvement, said he was “entirely content” with the deal, which he said preserved the responsibilities of European governments.

The deal pulled the eurozone back from the brink of what would have been a damaging row over how to help members with debt difficulties and may help stabilise financial markets and the currency.

The aid would be subject to assessments carried out by the ECB and the European Commission, ensuring that the European Union retained control of the rescue terms.

However, Berlin won agreement that the IMF contribution would be “substantial”.

Any decision by the eurozone countries to lend money to Greece would have to be unanimous, according to the text of the agreement, thus in effect giving Germany a veto.

The Franco-German agreement was presented to the other 14 eurozone leaders gathered in Brussels for an EU summit.

If the rescue plan is triggered, eurozone members would provide loans according to their capital shares in the ECB, ensuring that Germany would make the largest contribution.

The ECB announced that it was abandoning plans to raise its minimum collateral requirements at the end of this year. The unexpected move relieved some pressure on Greece, which could have seen its bonds excluded from ECB liquidity-providing operations if the country’s credit ratings were downgraded further.

France and Germany also have sought to commit their fellow EU members to the formation of an “economic government” for the Union, to promote stronger co-ordination of economic policy.

British officials said last night the wording had been changed from economic government to economic governance.

Gordon Brown, the prime minister, feared a backlash from the eurosceptic press if such an inflammatory phrase entered the final communique.

A British diplomat said: “The prime minister intervened to secure a change in the language. There’s no question of powers being ceded to Brussels or sovereignty being affected whatsoever.”

[Demeter]

63. Germans oppose Greek aid, poll shows

http://www.ft.com/cms/s/0/ee055e82-3529-11df-9cfb-00144feabdc0.html

Fierce German resistance to helping crisis-hit Greece has emerged in a Financial Times opinion poll that strengthens the hand of Angela Merkel, the chancellor, before a possible European showdown this week over financial aid for Athens.

Germans overwhelmingly opposed offering financial support to Greece as it struggles to control its public sector deficit and are strikingly more hostile than other Europeans, including the British, the FT/Harris poll showed. Almost a third of Germans believed Greece should be asked to leave the eurozone.

Further highlighting flagging support for the euro, some 40 per cent of Germans also thought Europe’s biggest economy would be better off outside the single currency – a significantly higher level of scepticism than in France, Spain or Italy.

The results follow a warning on Sunday by Ms Merkel against raising “false expectations” in financial markets of a eurozone bail-out package for Greece.

Harris PollIn an interview on German radio which appeared to put her at odds with José Manuel Barroso, European Commission president, she insisted that Greece had not asked for money and no decision had been taken.

The subject was not even on the agenda for a summit of European Union leaders in Brussels on Thursday, she said.

Mr Barroso issued a statement on Friday that called on EU leaders to reach an explicit agreement this week. He warned that a lack of clarity was unsettling the markets. A likely solution would be a co-ordinated package of bilateral loans.

Silvio Berlusconi, Italy’s prime minister, said on Sunday he was “absolutely in favour” of EU help for Greece.

Ms Merkel’s interview is understood to have been recorded before Mr Barroso’s intervention, but it still represents the strongly held view in Berlin that Greece must put its drastic budget austerity programme into effect before any financial support can be agreed.

“I do not see Greece needs money at the moment and the Greek government has confirmed that,” Ms Merkel said. “We do not want to create unrest in the markets by raising false expectations.”

The German chancellor reiterated the German opinion that tougher sanctions were needed to police budget discipline in the eurozone, including a view that countries could be expelled from membership if they persistently offended against the stability and growth pact.

Berlin is also fending off calls for its economic policies to be directed more at boosting domestic demand with the aim of reducing the country’s large trade surplus.

In a letter to the FT published on Monday, Ulrich Wilhelm, government spokesman, said the discussion “ignores the fact that Europe as a whole must become more competitive” and warned that “a less stability orientated policy in Germany would damage the eurozone as a whole”.

His comments amount to implicit criticism of Christine Lagarde, France’s finance minister, who asked last week in an FT interview if countries with surpluses could “do a little something?”

[Demeter]

46. Credit Suisse limits staff travel in Germany

http://www.ft.com/cms/s/0/c1d99480-351b-11df-9cfb-00144feabdc0.html

Credit Suisse has severely restricted travel to Germany by private bankers working for rich German clients with accounts in Switzerland, amid fears such employees could be detained by the authorities across the border.

The move follows the disclosure that authorities in Düsseldorf, capital of the German state of North Rhine-Westphalia, have purchased stolen data with the names of 1,100 Credit Suisse clients in Germany with Swiss accounts. The Düsseldorf authorities added they would pursue Credit Suisse staff suspected of helping Germans hide assets and avoid paying tax.

“We have made it very clear to relationship managers they must never assist clients evading tax,” said Andres Luther, a Credit Suisse official. “For some years, we have had very clear rules and regulations on travel. In the current environment, we have become very restrictive regarding travel to Germany.”

The bank has not yet had any contact from the German authorities, and stressed that employees have always acted in line with Swiss law....

[Demeter]

47. European groups’ dividends set to rise 18%

http://www.ft.com/cms/s/0/ad20027c-3520-11df-9cfb-00144feabdc0.html

Dividends at European groups are set to jump this year as profitability recovers from the credit crisis.

Pay-outs to shareholders are expected to rise 18 per cent for large European companies, according to a consensus forecast compiled by Factset, a data provider.

The forecast reflects optimism about dividend payments after a large number of companies declared higher dividends than expected for the past year.

Of the 354 members of the Stoxx Euro 600 index to report dividends so far, 51 per cent have beaten analysts’ expectations and only 21 per cent have missed them, according to ING....

[Demeter]

54. Serbia celebrates arms industry revival

http://www.ft.com/cms/s/0/dabe6fac-36ab-11df-b810-00144feabdc0.html

The M-84 was meant to be the great hope of the Yugoslav arms industry.

Exports of the main battle tank – copied from the Soviet T-72, with more engine power – served with Kuwaiti troops in the US-led liberation of their emirate from Iraq in 1991. Belgrade also supplied arms worth nearly $2bn to Iraqi forces fighting Iran in the 1980s.

But the M-84 could not survive the Yugoslav wars. With key components made in Serbia, Bosnia and Montenegro, while final assembly happened in Croatia, tank manufacturing fell apart with the failed federation.

Now Serbian arms exports have started thriving again, and there are even hopes of reviving the M-84.

The largest ex-Yugoslav republic expects to export nearly $500m worth of guns, military equipment and security know-how this year, as officials tour the Middle East to revive old trade and defence ties.

Weapons and military clothing, including body armour, now account for nearly 4 per cent of exports, finance ministry officials say.

Mladjan Dinkic, minister of economy, says: “The military industry is . . . doing well in the crisis and even increasing,” .

Companies such as Zastava Arms, which makes guns, and Utva Aircraft, which makes training aircraft, are increasing production, and Yugoimport-SDPR, the centralised trading group for six main state-owned defence manufacturers, has started securing deals comparable to those in the late 1980s, before war and sanctions devastated the industry.

Dragan Sutanovac, defence minister, says “In 2009, we approached the same level as we achieved in 1989 as the Socialist Federal Republic of Yugoslavia, which was three times bigger .

“We think that is a great success, but it is not our final goal.”

Serbia’s best sales prospects are seen among the countries of the Non-Aligned Movement, where it was once a leading force.

Some of the assortment of states that sought a middle way in the cold war used to buy Serbian arms and could do so again if the price is right.

Mr Sutanovac says: “It’s about tradition and good quality, at a good price”.

Iraq in particular has proved a lucrative market, taking more than a third of 2009’s exports. On visits to Baghdad then, Mr Sutanovac signed export contracts worth hundreds of millions of dollars, including an order for 20 Serbian-made training aircraft for the Iraqi air force.

To revive old ties, Belgrade’s military academy has started training Iraqi officers and medics. Officials have also talked about replacing Iraq’s “lost squadron” of MiG jet fighters – left for repairs in pre-war Yugoslavia, and then mothballed amid the break-up.

Stevan Nikcevic, Yugoimport director-general, says: “A lot of Iraqi officers and technicians are familiar with our systems,”.

Shared interests go beyond defence. About 60,000 Yugoslavs erected roads, bridges and power lines in the oil state before Saddam Hussein invaded Kuwait.

Mr Sutanovac says: “My father worked there in the mid-1980s as a construction worker”.

The two countries have also had some shared experiences since the cold war. Serbia, like Iraq, spent most of the 1990s under sanctions and plunged into armed conflict with the west.

Half the defence ministry in Belgrade remains blackened from Nato missiles in 1999.

The defence minister’s last delegation to Baghdad therefore included arms traders, electrical engineers and a Serbian businessman with concerns from brass bullet casings to bakeries.

Iraqi officials talked about reconstruction jobs in all sectors worth $70bn after US forces withdraw.

Mr Sutanovac says: “We’re convinced part of that cake can go to our companies”.

[Demeter]

60. Lebedev scoops up The Independent for £1

http://www.ft.com/cms/s/0/f4081652-373c-11df-b542-00144feabdc0.html

After months of negotiations and a number of missed deadlines, the sale of The Independent newspaper to Alexander Lebedev was completed on Thursday, for a nominal fee of £1.

Independent News & Media, the Dublin-based owner of The Independent and its Sunday sister title, was determined to unload the two newspapers, which lose about £1m a month.

Two people familiar with the business said it could have cost INM between £28m and £40m to close the two UK titles, because of long-term deals for printing and other obligations.

Talks with Mr Lebedev have been protracted and INM had to make substantial concessions, including a promise to pay the former KGB lieutenant-colonel £9.25m over the next 10 months. INM said this payment was “in exchange” for Independent Print Limited, Mr Lebedev’s company, assuming “all future trading liabilities and obligations”. However, INM, which was advised by Nicholas Shott of Lazards, had guaranteed a 12-year printing contract with Trinity Mirror, which had proved one of the sticking points.

Mr Lebedev’s company has signed a five-year contract with Trinity Mirror, leaving INM to take on a contingent liability beyond that point. He was determined to avoid a deal that included a printing contract with Trinity Mirror for more than five years, said a person close to the deal.

The sale will fuel speculation that Mr Lebedev will make The Independent a freesheet, as he did with the London Evening Standard, which he took control of in January 2009.

A spokesman for Mr Lebedev insisted that there were no immediate plans on that issue. But Mr Lebedev did raise the prospect of a new financing model for the paper, announcing that he would ask philanthropists to help fund “global media projects”, including The Independent and the Evening Standard.

Mr Lebedev said he would establish The Novaya Independent Media Foundation, a not-for-profit organisation, in collaboration with Mikhail Gorbachev, the former Soviet leader.

“We hope that other philanthropists will also be interested in maintaining quality journalism,” Mr Lebedev said.

Mr Lebedev has won a reputation as a hands-off proprietor among his reporters at the Evening Standard. “I’ve never known any newspaper that worries less about what its owner thinks,” a senior Standard journalist said.

Simon Kelner, managing director of The Independent and Independent on Sunday, told the FT: “Alexander Lebedev has not bought this newspaper to turn it into a newspaper that is not independent.”

Mr Lebedev’s spokesman said: “The Lebedevs are making a substantial long-term commitment to The Independent. They haven’t bought these newspapers to turn a quick profit but to invest in them over the long term, and ultimately ensure their long-term security.”

ROH-ROO! ROTS OF RUCK WITH THAT!

[Demeter]

61. Moscow cracks down on cybercrime

http://www.ft.com/cms/s/0/371526da-350b-11df-9cfb-00144feabdc0.html

Russia has quietly arrested several suspects in one of the world’s worst cyberbank heists, raising hopes of a previously unseen level of official co-operation in a country that has been a haven for criminals.

The Russian Federal Security Service (FSB) detained suspects including Viktor Pleshchuk, one of the alleged masterminds behind a £6m (€6.6m, $9m) attack on the payment processing unit of the Royal Bank of Scotland, people familiar with the inquiry told the Financial Times.

The FSB asked the Federal Bureau of Investigation in the US, which has made the probe one of its top international priorities, to keep silent on the arrests to avoid scaring other targets in Russia into covering their tracks. The FSB, FBI and the US justice department declined interview requests, while the bank said only that it was continuing to work with authorities.

“I believe we are embarking on an new era of genuine co-operation with Russian authorities,” said Don Jackson, a cybersecurity expert with SecureWorks in Atlanta who has documented shortcomings of Russian law enforcement.

RBS WorldPay, the payment processor, is also based in Atlanta. A US grand jury there indicted Mr Pleshchuk in November, along with Sergei Tsurikov, an Estonian, and Oleg Covelin of Moldova.

At the time a federal prosecutor said the probe had “broken the back of one of the most sophisticated computer hacking rings in the world”.

Allegedly led by Mr Pleshchuk and Mr Tsurikov, the group broke RBS encryption protecting the data associated with payroll debit cards distributed to employees of customer companies and used to draw down salaries. Counterfeit versions of the cards were used in a 12-hour period in late 2008 to withdraw cash from 2,100 ATMs in 280 cities, the indictment said.

US authorities said last year they had received co-operation in the case from other countries, including Estonia, which noticed suspicious withdrawals from cashpoint machines in Tallinn, then arrested Mr Tsurikov and arranged for his extradition.

Russian law forbids extradition of the country’s citizens, and it is unclear how severe the penalties would be for Mr Pleshchuk if he should be convicted there. It is also unknown whether the St Petersburg hacker was part of an established cybercrime gang that had been protected by officials.

Some Russian individuals and criminal groups have been able to deflect investigations through political connections while allowing their equipment to be used against opponents of the Kremlin.

US and UK officials have long been frustrated by their inability to make progress in Russia.

Two of the biggest US identity theft indictments in the past decade – against the “carding” group ShadowCrew and Albert Gonzalez, a hacker accused of stealing data for 40m credit and debit cards – alleged Russian involvement. Nobody has been arrested.

The few Russian nationals that have been apprehended were lured overseas or caught by friendly governments while on holiday. But that has not always furthered official co-operation.

Michael Schuler, an FBI agent, conned two Russian suspects into flying to Seattle in 2000, where they were arrested. But Russian authorities then said they were investigating Mr Schuler for his unauthorised remote searches of the hackers’ computers on Russian soil.

Western authorities had been loath to fault Russia publicly as they continued to seek better relations. People familiar with the matter said the FBI believed it had improved relations in the past year by putting less emphasis on ties to the MVD, Russia’s main national law enforcement body, and going directly to the FSB.

This, the successor to the KGB spy agency, is the most powerful bureaucracy in the country. Even the FBI is unsure what ultimately broke the logjam and produced the first significant arrests in what the US agency hopes will be the start of co-operative efforts.

But Mr Jackson and other private researchers noted that Russian cybergangs, facing increasing competition from each other and from organised criminals elsewhere, had released programmes designed to steal money from Russian bank accounts as well as those abroad.

“Russian cybercriminals no longer follow hands-off rules when it comes to motherland targets, and Russian authorities are beginning to drop the laisser faire policy towards these cybercriminals,” Mr Jackson said.

[Demeter]

15. THE ORIENT EXPRESS

YOU GET THE DRIFT BY NOW, I HOPE!

[Demeter]

16. China Wants Our Real Estate! (SEPTEMBER)

http://www.businessinsider.com/china-wants-our-real-estate-2009-9?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29

Apparently it's not enough for China to own all the world's resources -- it needs to own other stuff too, like real estate in the U.S.

After sitting out most of 2008, China's sovereign wealth fund is looking to dive in to real estate once again, says The Wall Street Journal. The China Investment Corp. is in talks with private equity groups and wants to snap up distressed assets in the U.S. taking advantage of certain government programs, like the PPIP.

Taking advantage of such programs will whip up an American backlash, so it's treading carefully:

WSJ: To be sure, CIC and other sovereign-wealth funds face considerable obstacles to investing in U.S. real estate.

Economic distress has resulted in growing protectionism on Capitol Hill, with some lawmakers blaming China for helping create a credit bubble in the U.S. by investing heavily in U.S. government bonds.

Any large-scale foreign acquisitions of U.S. property could lead to a political backlash reminiscent of the 1980s, when Japanese companies invested about $77 billion in the U.S. property markets and bought assets such as Rockefeller Center and the Pebble Beach golf course.

CIC is unlikely to replicate those showy investments.

It consistently has taken minority stakes, often below 10%, as CIC executives recognize the fund's lack of management expertise and the potential political ramifications of buying control. To minimize political risk, CIC's "debut in the U.S. property market likely will be double arm's-length investments," meaning through U.S. fund managers and then with a minority stake in the fund, as opposed to direct stakes in properties, says Michael McCormack, an executive director at Z-Ben Advisors, a consulting firm in Shanghai.

Related: Here's How China Is Buying The World

http://www.businessinsider.com/china-is-taking-over-the-world-2009-8

Read more: http://www.businessinsider.com/china-wants-our-real-estate-2009-9?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29#ixzz0jKIyLsu5

RECENT EVENTS AND THE BIG BUBBLE BUILDING IN CHINA MAY HAVE PUT THESE PLANS ON A BACK BURNER...

[Demeter]

17. Asian Economic Woes Force Layoffs Of 700,000 Pop Stars

http://www.theonion.com/articles/asian-economic-woes-force-layoffs-of-700000-pop-st,17144/

IT'S THE ONION, OF COURSE! WE COULDN'T BE THAT LUCKY

SEOUL, SOUTH KOREA—In what is being called the worst development to hit the Asian pop star industry in years, the floundering economy forced several Pacific Rim nations to lay off some 700,000 pop stars this week, sources close to the young, perky entertainers reported. "Although we still have more than 2 million pop stars left working, this is a devastating blow," entertainment industry analyst Bak Jae-bok said. "Sadly, the space-age Korean teenybopper and Japanese cowboy sectors were hit the hardest, and may take many months to recover." Bak went on to say that several Asian entertainment corporations are now looking to outsource their red-haired, leather-jacket-wearing teenage boy workforce overseas.

[ozymandius]

34. HOW DARE YOU TOY WITH MY DESIRES!

The Onion - I mean. Jeebus. I cannot get a decent Asian meal these days without a steady bombardment of Rolling Stones covers crammed through a drum pad sequencer with 80s synthesizer effects and caterwauling falsetto.

[Demeter]

37. I Don't Get Out Much--I Didn't Know

Sorry Ozy!

[Po_d Mainiac]

42. Wow..On the same day a NK torpedo

might have sunk a SK cruiser (unless it was some sailor sneaking a smoke in the magazine)

Whatever happened, there is a new reef on the bottom of the Yellow Sea

[Demeter]

20. CHINA VS GOOGLE

Beijing struggles over Google censorship

http://www.ft.com/cms/s/0/e2411406-3740-11df-b542-00144feabdc0.html

Internet users experienced wild swings in access to results on Google’s Chinese search engine on Wednesday, in a sign that Beijing is struggling to decide on the level of censorship for the site after Google moved the service out of the mainland.

At about 10am, users in Beijing were confronted with browser errors for every Chinese term they entered. Searches for “Xinhua News Agency”, “Ministry of Commerce”, “Chinese”, and “Ministry of Health” returned a blank screen. Some 30 minutes later the problem had disappeared.

An employee of Perfect World, the online gaming company, reported that a search for company information on google.com.hk had failed to return any results.

A little later, however, other users found links they could never have dreamt of when Google was still self-censoring its Chinese search results. A search for “Foreign Ministry” in Chinese returned the Foreign Ministry of the People’s Republic of China as the top result, followed by the Foreign Ministry of the Republic of China (Taiwan).

Beijing claims the self-ruled island as part of its territory and normally refuses to recognise that a separate state exists there. All references to Taiwan are purged from the web in China.

Censorship in China is often erratic. This is partly a strategy to make internet users and website administrators wary about what content they post or allow online.

An executive at a Chinese internet portal said applying varying levels of censorship could also be a strategy by the authorities aimed at discouraging Chinese netizens from using the site.

Diverging views between government departments is also influencing Beijing’s reaction. That became clear right after Google’s announcement of its decision on Tuesday.

While state media quoted an official at the State Department Information Office as saying that Google was “totally wrong to stop censoring”, the Foreign Ministry later in the day downplayed the development and said it was an individual commercial case.

“There will be a negative impact on Google in the short term as long as there is uncertainty over access, but in the longer term the risk is going to recede,” said Li Zhi, search engine specialist at Analysys, an internet research group.

Google’s move to redirect Chinese users to an uncensored search service in Hong Kong also presents Beijing with a dilemma.

In theory, the government could retaliate by blocking all Google sites outside the mainland’s borders – something that could include even Gmail.

China has blocked many western internet sites over the past year, especially those with social-networking components and user-generated content such as Facebook, Twitter and Youtube.

However, many observers in China believe Beijing is reluctant to block Google because it could harm China’s image. “I bet many people in the west hope that will happen to give you another pretext for demonizing China,” said Liu Jun, an engineering student, on his QQ instant messaging group.

The Chinese government also has to consider the risk that too loose controls could lead to a constant flow of information so sensitive that it would be seen as a threat to stability.

Analysts said the government was likely to monitor Chinese users’ search habits on the new site for a period of time before settling for more predictable blocking practices.

China Unicom ditches Google on mobiles

http://www.ft.com/cms/s/0/e30c04c2-3772-11df-9176-00144feabdc0.html

China’s second-largest mobile operator has announced it will remove Google’s search function from new handsets developed with the US company in the first concrete fallout of the clash with Beijing over internet censorship....

Chinese companies debate links with Google

http://www.ft.com/cms/s/0/fb71e0bc-3831-11df-8420-00144feabdc0.html

[Demeter]

23. AIA directors to quit ahead of Pru deal

http://www.ft.com/cms/s/0/4a906004-373f-11df-b542-00144feabdc0.html

Two senior executives are to leave AIA, the Asian businesses of stricken US insurer AIG, just weeks after its US owner announced plans to sell the company to the UK’s Prudential for $35.5bn.

Mark Wilson, AIA chief executive, told Hong Kong staff on Wednesday that Steve Roder, chief financial officer, and Peter Cashin, chief legal counsel, intended to quit the company, people familiar with the matter said....

The surprise resignations are the first public signs of unhappiness among senior AIA executives about the prospect of the agreed takeover by the Pru, its long-time foreign rival in the region, and about working with their counterparts.

AIA management lost out on a potentially lucrative ownership share of the business when its proposed initial public offering in Hong Kong was cancelled at the last minute in favour of a takeover by the UK life insurer.

“A few weeks ago, they were all guns blazing to the AIA stock market listing and neither now want to work for the company. Draw your own conclusions,” said one person familiar with the matter.

The Pru is expected to overhaul AIA’s management once it has completed a deal and is likely to prefer many of its own Asian executives led by Barry Stowe. However, losing important staff before the deal has even been approved by shareholders could affect adversely the assets the Pru is buying.

Mr Wilson, Mr Roder and Mr Cashin are credited by dealmakers as playing crucial roles in soothing concerns among regulators across the region about AIA’s solvency.

The internal announcement about their resignations comes as Tidjane Thiam, Pru chief executive, is halfway through another tour of Asia to sell the merits of the deal to staff, regulators and investors.

Mr Thiam will have to convince senior AIA staff and its 300,000 tied agency force of the benefits of the takeover to achieve the synergies and sale targets that underpin his rationale for the transformational deal.

He also still has to convince some of the Pru’s existing investor base to back the deal.

[Demeter]

24. China Railway wins $4.8bn Indonesia deal

http://www.ft.com/cms/s/0/aa50bc50-3843-11df-8420-00144feabdc0.html

China Railway Group has won a $4.8bn contract to build and operate an Indonesian coal railway, the latest in a string of offshore contracts for China’s state-controlled rail companies.

They have been winning rail projects across the world, including in the Middle East, Southeast Asia, Latin America, Africa and Australia. Chinese companies have also been snapping up global coal assets for the country’s power stations.

The deal is also further evidence that the once-frosty ties between East Asia’s two largest nations are now rapidly warming. It comes just weeks before Wen Jiabao, the Chinese premier, is scheduled to make his first visit to Indonesia.

China Railway, listed in both Hong Kong and Shanghai but majority owned by the state, said on Thursday it won the 24-year contract to design, build and manage the railway in South Sumatra for Indonesia’s Bukit Asam Transpacific Railway Corporation.

China Railway owns 10 per cent of Bukit Asam Transpacific Railway. Privately-owned Transpacific Group owns 80 per cent and Indonesian coal mining giant Bukit Asam owns the rest.

Beijing has made the transfer of sophisticated technology a prerequisite for international rail companies trying to enter the huge Chinese market and in the process, Chinese companies have rapidly become technologically competitive while offering much lower prices than their global rivals.

State-owned Chinese financial institutions usually offer favourable financing terms for projects such as the coal transport line in South Sumatra, making Chinese bids even more attractive.

China Railway announced on Monday a “strategic co-operation” agreement with state-owned Agricultural Bank of China to fund the railway. The bank will provide up to Rmb110bn ($16bn, €12bn, £11bn) in financing over the next three years to support China Railway projects, including its overseas contracts and projects related to exploiting natural resources.

Bukit Asam said it and its partners were in talks with four Chinese lenders to finance 70 per cent of the railway and the rest will be financed internally.

In spite of a history of turbulent bilateral relations, Chinese investment in Indonesia has in recent years significantly outstripped traditional sources such as the US.

Indonesia is the world’s largest exporter of thermal coal. Last year 15 per cent of its coal exports went to China.

[Demeter]

48. China to lose ally against US trade hawks

http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html

The US business community can no longer resist political pressure for Washington to take a tougher stand against China on trade issues, according to a senior figure from the US Chamber of Commerce.

Myron Brilliant, senior vice-president for international affairs, who has previously helped to protect Beijing from hawkish trade policies, told the Financial Times: “I don’t think the Chinese government can count on the American business community to be able to push back and block action .”

Speaking on the eve of a trip to Beijing, where he will meet senior Chinese officials, Mr Brilliant added: “Certainly the chamber remains a bridge in support of the relationship but it is a difficult time to keep the wolves at bay. China shouldn’t take the American business community for granted.”

Mr Brilliant said corporate America’s attitude had changed in response to a range of “industrial policies” pursued by Beijing, including the undervaluation of the renminbi, which made it harder for US companies to do business and compete with China. He also cited the tough economic times in the US – particularly the near 10 per cent jobless rate – as making it more difficult to argue against tough action on China.

The political heat in the US surrounding China’s currency policy increased last week when a group of Democrats and Republicans in the House of Representatives urged the Treasury to describe China as a “currency manipulator” in its report due in April. This move could be followed by sanctions. In addition, lawmakers from both parties in the Senate last week proposed legislation designed to force China to allow the renminbi to appreciate.

Mr Brilliant said it was too early for the chamber to take a position on the recently unveiled Senate proposal. However, he did say the chamber understood the “frustration” of lawmakers. “We concur that this is a growing problem,” he said, while adding: “I don’t believe in an eye-for-an-eye. I don’t believe that protectionism should be met with protectionism.”

In the 1990s, Mr Brilliant helped lead the chamber’s lobbying efforts in favour of China’s accession to the World Trade Organisation, persuading thousands of companies to push for its inclusion in the global trading system. “I don’t think I could pull that coalition together now. Part of it is that China is not playing by the same rules”

Meanwhile, China vowed again on Sunday to resist pressure for a renminbi revaluation and threatened to retaliate if the US imposed trade sanctions.

Speaking as Beijing sent a senior official to Washington to ease trade frictions, Chen Deming, commerce minister, said China would “not turn a blind eye” if it was labelled a manipulator by the US Treasury. Mr Chen said if the US falsely called China a manipulator for domestic political reasons, and sanctions followed: “We will not do nothing. We will also respond if this means litigation under the global legal framework.”

He added adjusting the value of the renminbi would not solve global trade imbalances, predicting that China could see its trade balance turn to deficit in March.

[Demeter]

62. UBS in talks over renminbi fund

http://www.ft.com/cms/s/0/7e874df6-3522-11df-9cfb-00144feabdc0.html

UBS is in talks with the Beijing municipal government on setting up a renminbi-denominated private equity fund as the Swiss bank looks to expand in China.

Financial groups are flocking to set up local currency funds in China because of the stricter regulatory hurdles that surround investments made in foreign currency.

The Beijing municipal government is looking at ways of deepening its involvement in private equity and has announced plans to establish an investment fund with Carlyle Group of the US.

The municipal government’s talks with UBS are at a “preliminary” stage, with no decisions made over structure, size or personnel, according to people familiar with the matter.

UBS declined to comment.

While there are a number of hurdles to negotiate, if successful it would be the first fund of its kind involving a global investment bank and a Chinese municipal body.

“The discussion is over how this fund is run and who puts what money in,” one person familiar with the matter said...

...Oswald Grübel, UBS chief executive, told the Financial Times while on a tour of Asia last week that the bank would consider investment opportunities in China because of its “appealing” growth prospects.

In 2006, the Swiss bank acquired a 20 per cent stake and management control of Beijing Securities, in one of the few such deals to grant a foreign group an onshore securities licence.

It holds the biggest quota among overseas groups to invest in onshore stocks through China’s restricted foreign participation programme.

UBS is a leading adviser to mainland initial public offerings.

Blackstone, the US private equity fund, has signed a memorandum of understanding with Shanghai’s financial district to launch a Rmb5bn ($730m) fund for investment in and around the city.

Foreign private equity groups are increasingly being challenged by aggressive domestic players that have sprung up with the encouragement of the Chinese government.

[Ghost Dog]

67. Japan's exports rise at fastest pace in 30 years

Japan's exports climbed at the fastest pace in 30 years in February as global trade recovered from the worst postwar recession, increasing prospects for a sustained economic rebound in the nation.

Shipments abroad increased 45.3 percent from a year earlier, helping the trade surplus expand the most since 1982, the Finance Ministry said on Wednesday in Tokyo. At 5.1 trillion yen ($57 billion), the value of exports remains about a third lower than the March 2008 peak of 7.7 trillion yen.

Demand for Japanese goods rose to all regions for the first time since August 2007, the report showed, fueling sales for companies from Komatsu Ltd to Mitsubishi Electric Corp. The trade revival has spurred factory production for 11 months, gains that economist Akiyoshi Takumori expects will continue.

...

The surge was partly due to a favorable year-on-year comparison. In February 2009, shipments abroad tumbled a record 49.4 percent as global trade froze following the collapse of Lehman Brothers Holdings Inc five months earlier. Exports fell a seasonally adjusted 1.7 percent from January.

Last month's rebound was driven by Asia, especially China, though the pace of the gains moderated as the lunar new year holiday took place in February this year and January in 2009.

Shipments to Asia advanced 55.7 percent in February from a year earlier, compared with a 68.1 percent gain the previous month. Exports to China, Japan's biggest overseas market, climbed 47.7 percent after rising 79.9 percent in January.

"Asian economies will likely maintain their robust recovery, helping Japan to sustain growth in exports," said Takahide Kiuchi, chief economist at Nomura Securities Co in Tokyo.

...

Demand in the US also picked up from a year ago. Shipments to the world's biggest economy surged 50.4 percent in February, the most since May 1984, the ministry said. Sales to Europe rose 19.7 percent, the third consecutive increase.

Imports climbed 29.5 percent, the fastest pace in three years. The trade surplus swelled to 651 billion yen, nine times bigger than the gap a year ago. The median estimate of 22 analysts surveyed was for 560.6 billion yen.

Recent reports show the rebound is spreading to the domestic economy. The unemployment rate fell to a 10-month low of 4.9 percent in January, bolstering consumer confidence. Service demand rose the most in more than a decade.

The Japanese government last week raised its assessment of the economy for the first time in eight months, saying the recovery is beginning to spur corporate earnings, home building and consumer spending.

/... http://english.people.com.cn/90001/90778/90858/90863/6929958.html

[Ghost Dog]

68. Japan's consumer prices continue to fall

Japan has been in deflation for 12 straight months, figures released by the government show.

Prices fell by 1.2% in February from a year earlier, threatening the country's recovery from recession.

...

The latest figures - where the core consumer price index fell by 1.2% - is not as bad as in previous months.

But the preliminary figures for Tokyo for March showed a steeper decline. The capital is seen as an indicator for nationwide trends.

Eyeing an election in the summer, the government is putting pressure on the Bank of Japan to further increase the money supply to tackle the problem.

...

But the government has little room to spend more to counter deflation.

Its debt is already the largest in the industrialised world and rising.

For this reason, analysts said it could be a long time before prices start rising again in Japan.

...

On Wednesday, parliament passed a record $1 trillion budget, much of it financed by borrowing.

The Japanese economy grew by 0.9% in the final three months of last year, or 3.8% on an annualised basis.

/... http://news.bbc.co.uk/2/hi/business/8588399.stm

[Demeter]

70. They Say It Like This Was a Bad Thing

I guess it depends on whose ox is getting gored.

[Demeter]

18. TO YOUR HEALTH!

DITTO

[Demeter]

19. AT&T will take $1B non-cash charge for health care

http://news.yahoo.com/s/ap/20100326/ap_on_hi_te/us_tec_at_t_health_care

AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.

The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.

All five are smaller than AT&T, and their combined charges are less than half of the $1 billion that AT&T is planning. The $1 billion is a third of AT&T's most recent quarterly earnings. In the fourth quarter of 2009, the company earned $3 billion on revenue of $30.9 billion.

AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.

White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.

Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits — including the subsidies — from their taxable income.

The new law allows companies to only deduct the 72 percent they spent.

AT&T also said Friday that it is looking into changing the health care benefits it offers because of the new law. Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.

Changes to benefits are unlikely to take effect immediately. Rather, the issue would most likely come up as part of contract negotiations between the company and unions representing its employees and retirees. AT&T is the largest private employer of union workers in the U.S.

Candice Johnson, spokeswoman for the Communications Workers of America, which represents more than 160,000 AT&T workers, said these employees have contracts in place until 2012. An agreement covering retirees also runs through 2012.

AT&T rival Verizon Communications Inc. was among 10 companies that sent a letter to congressional leaders in December warning that their costs would increase with the health care changes. Verizon spokesman Peter Thonis said the company had no comment.

Also on Friday, Reps. Henry Waxman, D-Calif., and Bart Stupak, D-Mich., said they are asking the CEOs of Caterpillar, Verizon, Deere and others to testify at an April 21 House subcommittee hearing on claims that the health care law could hurt their ability to provide health insurance to workers.

Shares in AT&T, which is based in Dallas, climbed 9 cents to close Friday at $26.24.

[Demeter]

76. Bill Bonner's Truly Twisted Ideas on Health Care

(I post this guy not because I believe or endorse everything he says. It's information, and a peek into another world view. And he writes well, which is a rarity in this time.--Demeter)

http://dailyreckoning.com/free-health-care-right-or-privilege/

Free Health Care: Right or Privilege? By Bill Bonner


03/23/10 Paris, France – The French media reports the passage of the health care reform bill as though it were the Emancipation Proclamation. Now, Americans have finally entered the modern world, they seem to say. Now, Americans have access to health care as a matter of right.

We’re suspicious of anything the French papers think is a good idea; they’re as bad as The New York Times.

That people think they have a “right” to health care just goes to show how little people think at all. “Rights” only make sense when they can be applied universally, without causing a “wrong” to someone else. You can have a right to own property, for example, because everyone can enjoy the right under the same terms and conditions. You can have a right to say what you like too…as long as everyone can say what he likes. But if you have the right to a cat scan, someone must have an obligation to make the machine…to put it in service…to run it…to maintain it…to offer it to you…and to interpret the results, etc. Who is this poor slave who has been shackled to your service?

According to the advertising, the health care bill is supposed to work miracles. It is supposed to reduce businesses’ health care costs, reduce the federal deficit, and lower insurance premiums. Of course, it will do none of those things.

“Now we’re really screwed,” says Jules, 22. “All you baby boomers are going to get more health care freebies and my generation is going to have to pay for it. Not only that, I’m going to have to buy health care insurance for myself.

“And the country is going down the tubes, too. It’s going to be just like every other government boondoggle program. It’s going to cost a fortune and make things worse. You know, I can’t believe they passed that bill. It was outrageous. They bribed everyone to get the bill passed. And even then, they couldn’t get Republicans to vote for it.”

France has a system of public health care that seems to work fairly well. On the two occasions when we’ve needed it…we found it efficient and dignified. One time, we were taken to the hospital in an ambulance; the local doctor thought we were having a seizure, a stroke or a brain tumor. It turned out to be an inner ear infection…but the service was good. No waiting. No problems. We were given tests…and it went away. Another time, Edward’s front teeth were knocked out in an accident while playing with the boy next door… He was rushed to hospital where the teeth were surgically re-implanted. Again, everything went well.

But France is not the USA and the French system is not at all what the Obama team has come up with.

The French system works as well as it does because the French are very critical, intolerant and demanding…of themselves as well as each other. At least, they used to be…

It is still rare to see a very fat person in France. People are expected to take care of themselves. They are expected to eat properly. Unlike the English, they do not drink to excess. And unlike Americans, they do not shoot each other on street corners. The concept of behaving “correctly” applies to ones’ health as well as to everything else. People are expected to act correctly – that is, in ways that do not put too much strain on the public health system.

What’s more, there is little ambulance-chasing by lawyers in France. Doctors and hospitals do not live in fear of lawsuits…and, in our experience, pharmacists give out advice, and medications, fairly freely.

[Demeter]

78. 3 Ways “Free” Health Care Will Cost You Dearly By Rocky Vega

http://dailyreckoning.com/3-ways-free-health-care-will-cost-you-dearly/


03/24/10 Stockholm, Sweden – The health care reform bill has passed. Any time a bill this expensive and complicated gets this far along in the lawmaking process it’s worth a second, closer look at the details that are likely to cause you the most heartburn.

Here are three points in particular from John Stossel at Fox Business:

“1) The ban on “discriminating” against anyone with a pre-existing condition. This is popular, and yet one of the most damaging part of the bill. It forbids insurance companies to charge sick people more for insurance. The result: I will wait until I get sick to get insurance. The bill supposedly has a $750 fine for not buying insurance But that won’t even be enforced …

“2) The cost. Supposedly $568 billion just for the years 2015 to 2019 (it doesn’t really kick in until 2015.) This comes at a time when the debt is already so high that the federal government is in danger of losing its AAA credit rating. And get this — Warren Buffet’s company can now borrow money at a lower rate than the US government — apparently investors believe his company is more likely to pay them back…

“3) Mandates will raise costs. The bill forces all insurance plans to cover ‘at least… maternity and newborn care… Mental health and substance disorder services… behavioral health treatment… preventative and wellness services and chronic disease management… pediatric services, including oral and vision care.’ In the real world, some people want these and some don’t. By requiring insurance companies to pay for all, we guarantee vast increases in wasteful spending…”

It’s no real surprise that Stossel finds the cost excessive or that new inefficiencies in the health care market will occur. Yet, it is interesting to see a downside to coverage of pre-existing conditions. Those clauses seem to be a favorite way for health care companies to dodge patient bills. We’ll see how the new system works on that front in due time.

For a longer explanation of each point visit John Stossel’s Fox Business commentary on the three worst Obamacare ingredients:

http://stossel.blogs.foxbusiness.com/2010/03/22/the-3-worst-obamacare-ingredients/

FUNNY HOW WE HATE THE SAME THING FOR DIFFERENT REASONS.

I HATE OBAMACARE BECAUSE IT KEEPS A PARASITICAL PONZI SCHEME ON LIFE SUPPORT AND INCREASES PAPERWORK AND DOES NOTHING TO REDUCE OVERHEAD. IT SIPHONS OFF PEOPLE'S MONEY INTO PROFITS FOR PAPERPUSHERS. IT'S NOT LIKE THE DOCTORS, NURSES AND TECHS WILL GET WHAT THEY DESERVE....AND NEITHER WILL THE PUBLIC GET THE TIMELY AND ECONOMICAL CARE THAT IT NEEDS.

[fasttense]

83. I want my death panels.

Where are they? Just about every RepubliCON was touting them, then sudenly when the bill passes, not one word about death panels. I have someone I want to put on the list. How do I get in touch with the panels?

Despite what Michelle Bachmann says, Grandma IS shovel ready.

:sarcasm:

[Demeter]

85. The Death Panels Are Run by the Insurance Companies, Natch

so they come grandfathered in.

[AnneD]

88. All I can think about...

is the Monty Python skit about the Plague....Bring out your dead.

www.youtube.com/watch?v=grbSQ6O6kbs

[Demeter]

29. THE MIDDLE EAST

SAME DAY, DIFFERENT CATEGORY

[Demeter]

30. Dubai World in line for $9.5bn injection

http://www.ft.com/cms/s/0/d74e16b8-37e3-11df-9e8e-00144feabdc0.html

Dubai unveiled a long awaited debt-restructuring plan yesterday, pledging to inject $9.5bn into the troubled conglomerate Dubai World, most of which will go to its developer, Nakheel .

The state support includes $3.8bn from the Dubai government over the next three years and a further $5.7bn from a $10bn loan by neighbouring Abu Dhabi to Dubai that was earmarked for Dubai World....

...The proposals would extend maturities on bank loans and inject cash into the businesses, in the hope that the holding company could be transformed into a cash-generating enterprise in five to eight years. Nakheel’s 2010 and 2011 bonds will be paid in full, as long as the proposals are adopted by a majority of the stakeholders....

[Demeter]

35. Suppertime!

http://www.youtube.com/watch?v=JEBFdHJIl-Y

Everybody's favorite beagle...from the musical "You're a Good Man, Charlie Brown"

The Younger Kid's dog, the beagledor, is a handsome mutt, and his mommy has taught him to talk. He says HELLO, I LOVE YOU, and according to the Kid, MAMA.

I've only heard the first two==and nearly ran away...this was what the Kid did for her spring break!

I took my grandpuppy to the dog park where he ran around like the adolescent he is. I nearly froze my face off. The windchill must have been near 0F.

[Demeter]

36. One More for the Road

http://www.youtube.com/watch?v=m82y3OVA7ZA&NR=1

I don't think I'll be back tonight, but who knows?

Add your own posts, dog pictures, comments, Elvis, whatever.

[DemReadingDU]

40. Blue Dog Bakery

http://www.bluedogbakery.com/index


Looking for blue dogs, and found this site.

[Demeter]

53. Time Warner in $1.5bn bid for MGM

http://www.ft.com/cms/s/0/d756d354-3610-11df-aa43-00144feabdc0.html

Time Warner will bid $1.5bn (£993m) in what is expected to be an all-cash offer for the assets of Metro-Goldwyn-Mayer, owner of the James Bond film franchise.

The owner of CNN and Time Inc magazine group controls Hollywood’s largest film library and is seen as placed to generate strong returns from MGM’s assets through its distribution network and relationships with pay TV companies.

MGM, saddled with $3.7bn in debt from a 2005 buy-out from a consortium of buyers led by Sony, initially attracted attention across Hollywood and beyond, with companies including News Corp, Liberty Media and AT&T seen as interested. But by last Friday’s deadline, only three remained.

MGM confirmed that a “number of bids” had been received and that it would review them over the next few weeks. MGM has not ruled out operating as an independent company.

The studio had hoped to attract bids topping $2bn, but has drawn offers of between $1.2bn to $1.5bn, raising the possibility of MGM lenders pushing for a prepackaged bankruptcy instead of facing a fire sale.

Earlier, Lions Gate and Len Blavatnik, the entrepreneur and owner of Access Industries, the US-based industrial group, placed separate bids, according to a Reuters report. The second-round bids are non-binding offers.

The studio has struggled to keep afloat of looming debt obligations as it suffered an industrywide slump in DVD sales.

Still, the studio’s Bond catalogue, rights to make future Bond films and its development of a film version of The Hobbit attracted interest from potential buyers.

The bidding for MGM coincides with the auction of the Miramax library, owned by Walt Disney, and Overture, the film arm of the Liberty Media Group, in the latest round of consolidation.

Time Warner’s strong balance sheet, with close to $5bn in cash and equivalents at the end of 2009, has also made it the frontrunner in the auction, people familiar with the discussions said.

As part of MGM’s exploration of strategic alternatives, the company said that it expected to work with lenders to extend the current forbearance period on its bank debt, which ends on March 31.

The company also expects to seek a forbearance agreement for its revolving line of credit, for which a payment is due on April 8.

[Demeter]

56. Bond issuers stay local in search for capital

http://www.ft.com/cms/s/0/32e01d92-36c1-11df-b810-00144feabdc0,s01=1.html

Corporate bond issuance in emerging market currencies has surged to record levels this year, deepening the local sources of capital for companies.

Groups have tapped increasing demand for local currency bonds not only from foreign investors but also a growing number of domestic funds seeking exposure to corporate debt.

This has lowered the cost of borrowing and reduced the risk for companies that foreign fund managers might stop buying their debt in times of crisis.

Emerging market corporate bond issuance has jumped to $68bn so far this year, up 58 per cent on the same period last year, according to Dealogic.

Local currency corporate bond issuance has made up $49bn of this, a 29 per cent jump on the same period last year and a 308 per cent increase on the same period just three years ago, when these markets were smaller and more immature.

Oil companies graphic for 2nd front Companies that have tapped the market this year include multinationals such as Vale, the Brazilian iron ore producer, Pemex, the Mexican oil company, TNK-BP, the Russian arm of oil group BP, Essar, the Indian partner of telecoms company Vodafone, and CNPC, the Chinese energy group.

However, smaller companies are increasingly able to borrow in the local currency markets, helped by the development of pension fund industries in countries such as Mexico, Brazil, Chile and South Korea. This is because domestic pension funds want assets denominated in their own currencies.

For example, in Mexico, Alsea, the restaurant operator, and Infonavit, the government-backed mortgage lender, have issued bonds recently. These bonds saw strong demand and traded higher in the secondary market once they were priced, underlining the appetite for this debt.

Eduardo Suárez, senior emerging market strategist at RBC Capital Markets, said: “These local currency bond markets are more liquid than they were. As the local pension fund industries have grown, so has the ability of companies to raise money in the local debt markets.”

The local currency corporate bond markets have also been boosted by a lengthening of the average maturity of emerging market government bonds.

This is enabling companies to issue longer-dated debt that gives them more stability as they can lock in fixed rates, often up to 10 years.

For example, the average maturity of government debt has risen above five years in Mexico, which is now longer than in the US with an average maturity of 4.8 years.

In both Brazil and Turkey, the average maturity of government debt has increased to three years from one and a half years in 2005.

Brett Diment, head of emerging market debt at Aberdeen Asset Managers, said: “In effect, many emerging markets are becoming more like developed markets as they become more sophisticated.”

[Demeter]

57. Daimler charged under US bribery laws

http://www.ft.com/cms/s/0/5b5aeaaa-36b1-11df-b810-00144feabdc0.html

Daimler has been charged with widespread violation of US bribery laws over a decade, a move that is expected to herald a legal settlement after lengthy negotiations between the carmaker and criminal prosecutors.

According to court documents filed by the US Justice Department, Daimler systematically paid bribes to foreign officials in at least 22 countries between 1998 and 2008.

The documents describe a company that tried to entice officials with anything from cash to job opportunities in exchange for lucrative government contracts.

In one case, the DoJ said the German carmaker provided the son of an unnamed Chinese official who made purchasing decisions for a state-owned Chinese oil company an internship at Daimler for him and his girlfriend. It also allegedly paid €2,223 for the Chinese official to attend a truck race with his son in July 2004.

In another example in 2002, the company allegedly paid €57,000 to the wife of a Chinese official at Sinopec, a state-owned energy company, just days after Sinopec agreed to purchase Daimler commercial vehicles. The agreement was part of a phony consulting agreement with the official’s wife in which “no services were performed”, the DoJ said.

“In some cases, Daimler wired these improper payments to US bank accounts or to the foreign bank accounts of US shell companies in order to transmit the bribe,” the court document said. It said that the alleged bribery was related to deals in Russia, Turkey, Egypt, China, Nigeria, Iraq and other countries.

Daimler declined to comment on any settlement of the charges until an April 1 hearing in the US capital.

Daimler has faced accusations of bribery since 2004 in connection with sales in its bus and truck division. It has also faced an investigation by the US Securities and Exchange Commission, which experts say may involve fines of several hundred million dollars.

A number of middle-ranking managers have left the company since the allegations were first made.

The case marks the latest example of how the DoJ is cracking down on bribery of foreign officials by US and non-US companies. BAE, the British defence group, recently agreed to plead guilty to false statement charges that were linked to bribery allegations and pay $400m in fines.

In 2008, the German engineering group Siemens settled a bribery scandal with US and German authorities in a €1bn deal.

The scandal at Siemens involved a system of slush funds to pay bribes for public contracts around the world. It led to the departure of almost the entire management board at the company and triggered investigations against a series of high-ranking managers worldwide.

The Siemens case in particular has increased the awareness of such issues in corporate Germany. A large number of German companies have stepped up their internal control systems or installed compliance units in the wake of the Siemens scandal.

[Demeter]

64. Work-from-home scams target mothers searching for the flexibility that employers don't provide

http://prospect.org/cs/articles?article=the_part_time_bind

...a vast, ugly free-for-all has sprung up to exploit mothers searching for flexibility and income. The Internet is so clogged with mom-targeted job scams that a recent Google search for "stay-at-home mother earning opportunity" was capped at 15 million. Some companies require representatives to purchase merchandise that they'll theoretically sell at a profit to other women. Before Foster started her massage business, she spent a year working for Avon, during which she wound up making outlays for inventory, brochures, and travel, among other things -- and losing $2,000.

Other companies require an up-front registration fee for members to gain access to exaggerated or nonexistent opportunities. Work-at-Home-Mothers' Web site (WAHM.com) recently posted an ad from FreelanceHomeWriters.com announcing the dire need for highly paid bloggers, who, according to the site, can make $61,440 per year -- "Cha Ching!" Yet in order to tap into the supposedly gushing river of lucrative writing assignments, women have to fork over a $47 monthly membership fee.

According to Staffcentrix, a company that investigates some 5,000 leads for such jobs every week, entities looking to make money from mothers themselves vastly outnumber real work opportunities online. For every legitimate work-from-home job advertised on the Web, there are some 57 scams, according to Christine Durst, the co-founder and CEO of Staffcentrix. And that ratio doesn't even include spam. Although one would think the reek of hucksterism would deter most job seekers, a startling array of ads announce these "job opportunities" with capital letters, exclamation points, dollar signs, and even, to convey the life of leisure you're supposed to live once you give them some money, images of palm trees. "Get Paid for Being a Mom!" "Your Own Crafts Business Making Photo Jewelry!" "Mom earns $250 in first week!" Many of the "jobs" involve selling everything from herbal energy drinks to mineral makeup, weight-loss powders, organic beef jerky, and Christian party kits, and often sellers have to purchase this merchandise first.

"The more desperate a demographic is, the more likely they are to be bamboozled by scams," says Durst, who has met dozens of women who have been burned by various scams in their search for part-time work. Staffcentrix contracts with the U.S. Army to help find legitimate part-time and work-at-home jobs for military wives (whose unemployment rate is upward of 20 percent, according to Durst), and many women approach her at workshops with their tales of woe. Many of the scams she hears about are not unlike pyramid schemes: disreputable multilevel-marketing companies that require an endless stream of new members. But in addition to having to recruit new dupes, participants in multilevel-marketing schemes such as Melaleuca, Herbalife, and Mary Kay also sell some sort of product. Hoping to distance themselves from both terms, such companies tend to refer to themselves as "direct sales" and give their recruiters fancy names like "independent beauty consultants," as they're called at Mary Kay, or "home business travel agents," as they're called at the multilevel-marketing company YTB Travel.

The vast majority of the people who get caught up in these schemes are women. (Eighty-eight percent of the people involved in direct sales in 2007 were women, according to the Direct Selling Association.) And despite the big promises, most people, not surprisingly, are more likely to lose money than to get rich. According to the calculations of Jon M. Taylor, adviser to Pyramid Scheme Alert and the author of The Network Marketing Game, only 0.13 percent of all Melaleuca participants earn a profit after their expenses and product purchases are taken into account. (It would be difficult to earn enough to rival costs, which include a registration fee, mandatory monthly expenditures on products, purchase of the recommended $199 "value pack" or $299 "career pack," and the cost of advertising to lure new customers.) Thus, according to Taylor, Rachel Foster's chance of winning with snake eyes at craps is about 25 times greater than her chance of succeeding as a Melaleuca distributor.

Many of these companies feed off -- and often wind up eroding -- -women's social networks. Foster found the women she's signed up -- "my girls," she calls them -- through her church, her daughters' friends' mothers, and ads on moms' Web sites. Many companies often encourage women to hold Tupperware-style parties to sell the products. Yet the pressure to exploit other women for their meager resources can end friendships, as it did for someone named Olivia, who posted on PinkTruth.org, a Web site for recovering Mary Kay conscripts. After her best friend recruited Olivia into the company, their relationship fell apart. Olivia describes Mary Kay meetings this way: "Inside, everyone was happy happy shiny sisterly love, etc. Outside, they huddled in packs, smoking cigarettes and ripping others apart with their nasty comments."

There is ample evidence of women being bilked by blatantly fraudulent companies, but these cases are only very occasionally prosecuted. While state and federal laws prohibit pyramid schemes, many multilevel-marketing companies slither in the gray area between outright pyramid schemes and legitimate businesses, making them difficult to nail down and punish. The Federal Trade Commission would be the likely agency to tackle the problem, but its efforts are hampered by a limited budget. According to Staffcentrix's Durst, who is assisting the FTC in an investigation of one predatory multilevel-marketing company, the agency can afford to go after only one of many people involved with the scheme, due to time and money constraints.

Although states tend to struggle with the same budget problems that the feds do, a few have sued multilevel marketers. In 2006, the Montana state auditor sued Ameriplan, a multilevel-marketing company that promotes its health-benefits business heavily to stay-at-home moms. Offering women "a business with no experience needed!" and "huge quarterly bonuses!", Ameriplan could seem like a good solution to someone with a deep-enough need for both money and health insurance. Yet according to the suit, the company didn't actually contract with local health-care providers as promised, leaving the Montanans who participated out of luck and their monthly fee, which ranges up to $59.95. Ameriplan gave the state $200,000 as part of a settlement of the suit, which charged the company with conducting a pyramid scheme, in addition to engaging in insurance and securities fraud.

Ameriplan is significant not only for being a huge multilevel-marketing company that targets women. (Because it's "too much like a pyramid scheme," Staffcentrix's Durst puts Ameriplan in the scam category and won't allow it to post on her company's job boards.) The health-benefits company also provides a window into one of the reasons for many women's lack of decent flexible and part-time work options: our system of employer-based health insurance, which leaves so many women without coverage. Ameriplan not only capitalizes on the overall lack of health insurance nationwide (according to the company's Web site, the fact that seven in 10 Americans are either uninsured or underinsured "presents the opportunity of a lifetime!"), it also particularly homes in on women's lack of health insurance.

Indeed, the lack of a health--insurance system is intimately related to the employment difficulties among mothers. There's ample evidence that a growing number of full-time working mothers would prefer part-time work. A 2007 poll conducted by the Pew Research Center found that 60 percent of working women who have children under 18 say they want to work part time, up from 48 percent in 1997. Only 21 percent of working women felt that full-time work was the ideal situation for them. (Perhaps this dissatisfaction shouldn't come as a surprise, given that the United States has one of the highest percentages of full-time working women in the world.) While many of these women are working for the extra income, many, too, stay with their jobs because they have no other way to get health benefits for themselves and sometimes for the rest of their families.

***

Despite the sordid mess that has sprung from American women's intertwining needs for decent part-time work and health insurance, other countries have succeeded in ensuring women have access to flexible work schedules. A big part of the solution is that all of these countries have universal health coverage, so that working fewer hours needn't mean losing the ability to get medical care. But the European Union has also clearly recognized the need for flexibility in work, having guaranteed parity in terms of pay and benefits for part-timers since 1997. Germany and the United Kingdom have gone further, ensuring workers the right to request to change their hours. But the clear leader in terms of flexible and part-time work options is the Netherlands.

With the satisfaction of family needs and desires in mind, the country has fastidiously created a "part-time economy" over the last few decades, passing and tightly enforcing laws that require employers to grant workers flexibility. While everyone has health insurance, regardless of his or her employment status, the Dutch have also passed a number of protections for part-time workers that allow men and women to make work fit into the rest of their lives, instead of the other way around. A 1982 agreement solidified the right to cut down work hours without sacrificing benefits. And subsequent laws ensure that a worker's schedule can't be an issue in whether he or she has a contract extended or terminated.

Having harnessed the political will to make decent, well-paid, part-time jobs with good benefits available, the country now has the highest rate of part-time work in the world. Three-quarters of working Dutch women have part-time jobs -- and not the low-paying, low-status type you find in the telemarketing, food service, and retail industries where so many American mothers toil. (Multilevel-marketing schemes are few and far between in Holland, and companies masquerading as health-insurance providers are nonexistent.) Essentially, Dutch citizens can tailor almost any job to a less than full-time schedule. Because nearly a quarter of working men (22.5 percent) also choose this part-time option, many Dutch couples have found a way for both parents to work and spend significant amounts of time with young children, and the country has taken an important step away from the overwork and overwhelm that define life in so many developed economies.

The part-time protections have been credited with raising women's employment -- which is higher than the American rate -- as well as boosting national fertility, because women are more open to having children if they can be moms while also maintaining their careers....

MORE AT LINK

[DemReadingDU]

65. Eric Sprott Is Not Optimistic

3/27/10 Eric Sprott Is Not Optimistic
King World News interviews Eric Sprott, who effectively melts the wires with the heat of his pessimism. Alarmingly, it is fairly hard to argue with his reasoning.
http://www.zerohedge.com/article/eric-sprott-not-optimistic

click for the MP3 link to audio, and a bio of Sprott
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/27_Eric_Sprott.html

direct link to MP3 audio appx 40 minutes
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/27_Eric_Sprott_files/Eric%20Sprott%203%3A27%3A2010.mp3

[DemReadingDU]

69. John Xenakis: Where should you keep your money?

3/27/10 Where should you keep your money? John Xenakis blog

This is a question that I get asked all the time for years. My answer has generally been (for Americans, anyway) to keep your money in FDIC-insured bank accounts or in short-term (6-12 month) Treasury bills, which can be obtained online with no fee from http://treasurydirect.gov .
.
.
I continue to discourage people from owning gold, unless they have enough money to keep gold in addition to cash. Gold is in a bubble, and should be priced around $500/oz. Any spike in gold prices might be short-lived, even in an emergency.
.
.
Let me experiment with a different approach. I'd like to rate various savings options based on the amount of savings you're liable to have left after a worldwide financial crisis. 100% means you'll have all your principal, 0% means you'll lose everything. A value greater than 100% is theoretically possible, and means asset appreciation. Here are my ratings:

* FDIC-insured bank account: 98-100%. (Taking into account interest rates versus chances of FDIC not paying out.)
* T-bills: 97-100%. (Taking into account difficulty of redeeming them.)
* 10-year Treasury bonds: 70%.
* 30-year Treasury bonds: 50%.
* Gold: 50%.
* Stocks: 10-20%.

However, these recommendations won't apply to everyone. You have to evaluate your own personal situation to decide what's right for you.

It's also a very good idea for you to be prepared for you and your family to survive in your home for a couple of weeks. This means having canned foods, flashlights, and medicines available.

more...
http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e100327#e100327

[Demeter]

72. He Is Obviously Assuming No Hyperinflation

He's putting all his faith in the fiat currency and the infinite willingness of Uncle Sugar to maintain its value.

This is where I'd keep it:

Finances: No Debt, cheapest transportation, squeeze the pennies

Shelter: Live where you want to stay forever in passive solar home with PV and biodiesel, compost, etc. Find a safe haven.

Agriculture and Manufacturing: Supplies, tools, education, farmland or woodlot, water source, water purification scheme, basic chemistry and paper making, sewing, etc. Learn how to recycle and reuse everything

Medicine: Maximize and maintain health for self and family, friends, community.

Culture: books, films, art, histories, biographies, science and technology.

Personal history: for generations to come, diaries, letters, documents, photos

Organization: It doesn't pay to collect stuff that sits in heaps and deteriorates.

Teach others.

The less cash needed, the more likely you are to survive.

[DemReadingDU]

75. Excellent!

I do that too.

I think Xenakis was writing more for the people who have money and are getting worried about a crash that could lose their principal.

[DemReadingDU]

71. Bloomberg video: Prechter Sees Selling Opportunity for Stock Investors

3/27/10 John Xenakis: Robert Prechter appeared on Bloomberg tv on Friday, and said that his Elliott Wave analysis is now predicting the end of the stock market rally within the next few weeks. Here's what he said:
http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e100327#e100327 transcript

3/26/10 video appx 2 minutes
http://www.bloomberg.com/avp/avp.htm?N=av&T=Prechter%20Sees%20Selling%20Opportunity%20for%20Stock%20Investors&clipSRC=mms://media2.bloomberg.com/cache/vXCL5JFIa7zo.asf

[Demeter]

74. As if the Little Guy Was Still in the Market

except for the forced investment class: 401K and the like.

[DemReadingDU]

77. oh, some of my family are still in the market

They have professional financial planners who tell them that the market might go down, but it always recovers.

I asked my sister why she stays in the market when so many people feel that a crash is coming? She said she doesn't want to miss the gains.

:wtf:

[DemReadingDU]

73. Free* Government Money With Matthew Lesko!

LOL


http://www.youtube.com/watch?v=gYTjiIm4h_Q

[Demeter]

82. US Economic Outlook: Inverting the Cost-Benefit Structure By Bill Bonner

http://dailyreckoning.com/us-economic-outlook-inverting-the-cost-benefit-structure/


...Now we’re calling it “The Great Correction”…in which we’re expecting a number of things to get sorted out – including the stock market boom from ’82-’07…the post-’71 dollar-backed monetary system…and the huge credit expansion that goes all the way back to 1946.

But that’s not all. It could be that this period will correct the whole, extraordinary surge in Anglo-Saxon power that began in the 17th century. English speakers have been on a roll since Sir Francis Drake defeated the combined armada of Spain and France in 1588. Soon after England began putting together her empire…and then, the industrial revolution turned Britain and America into economic powerhouses.

In addition to reducing asset prices and de-leveraging the economy, The Great Correction could be reducing the relative power and influence of the English speaking peoples. We don’t know…but that’s the way it looks now…

(HE SAYS THAT LIKE IT'S A BAD THING...)

“Then, when you come back to France or America, you’re suddenly back in the past. It’s a relief, because everything seems familiar and orderly. Like a museum. But it’s a let-down too…because you’re back to dealing with old problems…old people…and old institutions. While the emerging economies look ahead…the developed ones look back.”

What is this health care bill? Is it a new way of making the future better? Or is it an old solution to an old problem? The feds first considered a takeover of the health care industry during the Roosevelt administration. They’ve been working, planning, plotting their way towards the same objective ever since – for 80 years.

And what they’ve finally gotten is yesterday’s bad solution to yesterday’s problem.

The nation state was invented by the French at the beginning of the 19th century. By the middle of the 19th century, Otto von Bismarck added the refinements that we know today as the modern welfare state.

And now…as every welfare state in the world faces decline and bankruptcy…America has completed its collection of welfare state essentials – with a national health care system.

Why are the old welfare states going broke? Because the payoffs to the past have become too great. There are too many old people who expect pensions and health care. There are too many old industries that, like patients in a mental hospital, need to be cared for. There are too many bailouts…too many subsidies…too many protections…too many safety nets.

Every society is a pact between the future and the past. A new society looks to the future. An old one looks back at the past. As a successful economy matures it owes more and more for things that have already happened. China builds new high-speed railways, for example, while in the US we’re still paying Amtrak’s losses of the last 40 years.

Over time, more and more special interests, anglers, parasites, leeches and lobbyists get a grip on a financial system. They find ways to take advantage of it…to exploit the system for their own ends. Trade unions, business groups, the rich, the poor, the middle classes – everybody wants a benefit.

The health care act is not a bold new initiative that will lead the country forward into a new era. It is 2,400 pages of payoffs to old interests – payoffs to senators and congressmen for supporting the bill, payoffs to the pharmaceutical industry, payoffs to organized labor and insurance companies…payoffs to groups that were set up many years ago.

The benefits go to the past; the costs go to the future. Even if the economy were running at normal speeds, the deficits of the world’s leading welfare states would still be increasing. Only 10% of current deficits are related to “stimulus” efforts. The rest is payoffs… To organized interests representing the past.

In the US, Federal debt is expected to reach 140% of GDP by 2014. In the G7 countries as a whole, debt-to-GDP will go over 100% just two years from now.

The welfare state model is no longer the model for the future. It’s a model for the past…that will soon be defunct.

WELL, BILL, IF THERE WEREN'T CRONY CAPITALISM AND CORRUPTION AND CAPTURE OF THE REGULATORY APPARATUS AND STOLEN ELECTIONS, THERE WOULDN'T BE THIS NEGATIVE OUTLOOK HERE AT HOME ABOUT THE "WELFARE STATE" WHICH WE REALLY DO NOT HAVE, COMPARED TO PARTS OF EUROPE. THEY'VE GOT ALL THAT CORRUPTION IN ASIA, TOO. THEY JUST DON'T HAVE ANY SAFETY NET FOR PEOPLE AT ALL....SO IT LOOKS LIKE THEY ARE MAKING PROGRESS, BUT THEY AREN'T. THE PEOPLE CANNOT PROSPER UNDER UNREGULATED CAPITALISM AND GLOBALISM. THEY AREN'T ALLOWED TO.

[Dr.Phool]

84. Man goes berserk when dog dies in surgery.

March 27, 2010
Man goes berserk when dog dies in surgery
A man whose schnauzer died after surgery is accused of threatening and choking a Palm Bay veterinarian, floridatoday.com reports.

Police arrested Samuel Winstead, 60, of Rockledge and charged him with aggravated assault and battery.

It was described as routine surgery.
Posted by John Chamless at 07:30:00 AM on March 27, 2010
in | Permalink

[Demeter]

86. A tragedy all around

Poor dog, man and vet....

[KoKo]

87. Media Matters McChesney interview with Dean Baker...Excellent!

Scroll Down on the site. It is worth the listen for those who missed it on PBS last Sunday.

Sunday, March 21, 2010
Dean Baker joins McChesney in a discussion about the American Economy

Dean Baker is the co-director of the Center for Economic Policy and Research in Washington DC. A columnist for the Guardian, The American Prospect, and Truthout.org, Baker writes regularly for the Washington Post, The Atlantic, and the Financial Times, and appears frequently on National Public Radio, CNN, CNBC, and PBS’s NewsHour. His latest book is False Profits - Recovering from the Bubble Economy. Call and comment!

http://will.illinois.edu/mediamatters


:hi: Thanks Demeter for all the links and work on them.

[bread_and_roses]

89. Hello WE'enders

I had meant to post some additional stuff from NPR - not because it was anything new here, just because I was so astonished that Friday had several stories that actually raised even obvious questions about our current financial course - not only "A Fix For Banks Too Big To Fail: Cut 'Em Down To Size," http://www.npr.org/templates/transcript/transcript.php?storyId=125226783 but http://www.npr.org/templates/story/story.php?storyId=125229165 "Financial Blogger On Ethics Of Mortgage Modification" which has this little nugget:

There are a lot more effective ways to spend $14 billion than essentially rewarding the banks that were just so reckless and irresponsible. It just doesn't make any sense.

...again, nothing extraordinary, but just suprising for Nat Prop Rad (a little personal joke making fun of National Geographics' ludicrous attempt to makes itself sound "cool" by adopting the "re-brand" "Nat Geo")

But I've had a hellish weekend, and just can't really do my share. So thanks to all of you for your posts, which have at least diverted me for a minute or two, even if I am too distracted to really absorb all the content, and thanks for the pointed commentary in response to my reply to post #1 - you guys gave me one of my few smiles this weekend. So to all of you... :yourock:

[bread_and_roses]

90. This is a fascinating article - and frightening

It's content is only peripherally related to our main topics here at WE, but it's substance is as illustrative as anything I've read recently about the dangers of questioning - even mildly, meekly! - the status quo of TPTB.

http://www.alternet.org/news/146164/how_a_77-year-old_visionary_author_became_the_target_of_a_far-ranging_right-wing_conspiracy_theory?page=entire

"How a 77-Year-Old Visionary Author Became the Target of a Far-Ranging Right-Wing Conspiracy Theory
The bizarre tale of how Frances Fox Piven came to be seen as the author of a blueprint for a radical takeover of American society by paranoid conservatives"

Olson asks Piven about Glenn Beck's persistent attacks on her Nation article, which the Fox News host regularly blames for many of America's problems, including the current financial crisis. "Can you think of anything sillier than to attribute the financial crisis to an article in a low-circulation magazine in 1966?" She calls Beck's efforts to find an easy "scapegoat" for the country's troubles typical of "right-wing ideologues."

yes, indeed, the article in question is from 1966 - the memories of our Masters are indeed long, and no message alternative to their own, no matter how ancient, how academic, how-long disappeared (the Welfare Rights movement died long ago, alas, and its' successor, ACORN, well...we all know what happened there).

I tell you, no wonder that those of us who self-identify as somewhere to the left of the mainstream Dems sometimes succumb, at least briefly, to fear and uncertainty in the dark of the night.

[Demeter]

91. The Resources Are Endless, But

I was up at midnight to sub for a fellow on his Free Press route...I haven't had but 3 hours of sleep and not enough nap to do any good.

It's also raining, a cold soaking rain that started at 8 AM. So I will leave you all with these thoughts for the week:

http://www.youtube.com/watch?v=OjZ3pU0NMZA&feature=fvw

http://www.youtube.com/watch?v=_iK9PLdVXK4&feature=related

http://www.youtube.com/watch?v=PjFE9uy3N38&feature=related